Pick an adviser who connects with you
Experts screaming about your money may make for good TV, but it doesn't always work one-on-one
NEW YORK (MONEY Magazine) -- I've noticed something about the financial advice that seems to register with Americans these days: It's getting louder.
There's Jim Cramer yelling "boo-yah" on CNBC. There's Dave Ramsey inviting listeners to his radio show to call in and scream "I'm debt-free!" And of course there's Suze Orman, whose confrontational style is so well known she was recently asked to work her magic on a fictional character on HBO's Big Love.
These folks are all over bestseller lists, the airwaves and the lecture circuit. They're part of a recent American fascination with being told just how wrong we are, by the likes of Simon Cowell, Judge Judy and Ann Coulter.
And sure, television financial pros give good advice most of the time. But plenty of other people do too.
What is it about screamers' messages that resonates?
It's the scolding.
Robi Ludwig, a New York City psychotherapist, thinks that our attraction to this breed of financial guru stems from our own insecurities.
"So often we feel childlike and out of control when it comes to money," she says. "These people step in and become the punitive parents. They are going to set limits, to punish us, to yell at us for being bad."
But what you like watching on TV isn't necessarily what you should look for in a personal planner. Haranguing may be appropriate on "American Idol," but it's not the best way for everyone to get financial advice one-on-one.
If you're craving someone to wag their finger at you, it reveals a certain guilt about your finances, as Ludwig suggests. It may also mean you're approaching the adviser relationship all wrong. Someone who uses your innate financial fears as a motivating tool likely won't teach you as effectively, even though you'll probably feel as though all that yelling must be doing something.
University of Rhode Island professor James Prochaska, co-author of "Changing for Good," studies people who are attempting to break habits and has found that successful people respond better to positive reinforcement than to punishment.
And Drexel University psychology professor Myrna Shure says that when children are being yelled at, they tune out completely. Not an ideal atmosphere in which to learn how to rebalance your portfolio.
Fortunately, there are all kinds of financial advisers out there. The two primary types, says Gary Namie, president of WorkDoctor.com, are teachers and commanders.
A commander says, Trust me. Give me the responsibility and I'll do the work for you. You don't need to know the details.
A teacher says, Here's how you diversify your portfolio. Here's how we figure out how much insurance you need.
"Teachers foster longer-term relationships," he says. Santa Clara University finance professor Meir Statman, who has studied the temperaments of investors, concurs: The best teachers, he says, don't get offended when you stumble on a concept the first time they explain it. Upon seeing your puzzled look, they should pause and say, "I don't think I explained that very well. Let me give you an example."
A teacher is the superior choice, and under that genus are countless personality species, one of which is the perfect match for you.
When choosing, the first rule is to interview candidates twice. Why? Because more interaction will help you follow the second, more nuanced rule: You need to select someone who dishes out wisdom and information in a style that works for you.
A lot of people can teach sound financial practices. But not all of them can do it in a way that will help you -- you, personally -- to get ahead.
Know what you want
Going to a financial planner for the first time can be as intimidating as going to see a medical specialist, says Olivia Mellan, a psychotherapist in Washington, D.C. and author of "Money Harmony."
You might not have an insider's grasp of financial tools or the jargon that goes with it. Just as it's advisable to communicate to a doctor what's bothering you, it's a good idea to describe your goals to a planner.
What are the financial issues you've heard about but don't quite understand? Bring a list so you don't forget anything.
Match your temperament
Some people, says Statman, are "rationals" - they prefer to receive information in numerical terms.
Others are "idealists," who like their explanations in plain English, with analogies to help them understand the point.
If you sit down with an adviser and you feel as if she's speaking ancient Mayan, give her a chance to translate, Statman says. "Advisers are sometimes unaware that their particular style doesn't go over well with all customers. They may not know that you failed math in high school and that it's painful for you to sit through endless correlations."
Try saying, "I'd prefer you explain things to me by making analogies to cooking or driving or something else I'm familiar with from daily life." (See what money-type you are.)
Or take your punishment
If nothing else works - not the soothing grandfather, not the number-crunching brain, not the adviser who feels like your best friend - then a scold might be worth a shot.
One reason the Jim Cramers and Suze Ormans of the world are so successful is that there are people for whom their style works. "It's called tough love for a reason," says psychotherapist Ludwig. "These experts have very strict ideas about how to live your financial life. It's their way or the highway."
Maybe the only way you'll gain a feeling of control is by taking orders from someone who yells louder than everybody else.
Editor-at-large Jean Chatzky appears regularly on NBC's "Today." Contact her at firstname.lastname@example.org.