Would You Take Advice From A Settlement Planner Who Had Problems Managing His Own Money?

A Free Money Finance blog posted  "Would you take advice from a financial planner who was doing poorly financially himself?" is a very interesting read, particularly the comments. It and the Chapter 7 bankruptcy filing I read today which showed an abundance of Neiman Marcus, Bloomingdales, big credit card debt, home equity line "to the max" etc., in an area that is a heck of alot cheaper to live than where I do, made me adapt the question in relation to those who advise tort victims.

Should tort victims work with settlement planners whose spendthrift proclivities mirror those who they are duty bound to protect? What about plaintiff lawyers who refer the spendthrift settlement planner to one of their clients?

I've been doing this gig for a long time and I love it, but I never forget those salad days back in the early to mid 1980s. One has to start somewhere. But then where do you go from there?  How do you buildy our business? How do you establish and maintain credibility? I think alot of it has to do with knowledge leadership and your ability to articulate it. The business is dynamic and you have to invest in your head. You need to innovate. You also need to inspire confidence and how you carry yourself, how you manage the financial aspects of your own business and your life is a big part of it.

Prudent risk management is important in any financial plan, particularly those that are doling out advice to anyone, let alone tort victims with catastrophic injuries, who likely have little to no means to earn back mistakes.

Anyone can have unforeseen medical bills. Isn't that why plaintiffs need liquidity in their settlement plans? Do you have insurance? Do you have an HSA? Do you need a special needs trust?

What sort of risk management have you done to protect a drop in income or wealth? Do you have a budget and adhere to it? Do you have a reserve fund? Do you have disability insurance? In dual income households, have you planned for the contingency that one spouse may die prematurely.  But for "Sully" Sullenberger some families of US Airways 1549 might have been looking at that question in hindsight.

The old adage "people don't plan to fail, they fail to plan" resonates.

Structured settlement annuitants who spend recklessly on material items and fail to budget are susceptible to the sirens of financial crack dealers and cash now pushers. It is clear how the New York Judiciary feels about tort victims mismanaging their money. Which is worse "the squandering tort victim", or the "squandering settlement adviser?".

Why should we not question the credibility of those who emphasize "extensive financial services careers" or "spearheading multi million dollar portfolios" in their sales pitch to tort victims, yet demonstrate a reckless lack of discipline with their own finances?

 

 

Comments

[Russell]

During the 10 years when I did debt law, I separately assisted and represented at court two women who both worked as credit controllers for a construction firm that had built the actual court we were in ... Nuts, eh?