TONY'S BLOG
 
Send In The Clowns

August 24, 2016

Do you enjoy good music?

I sure do.

I grew up in a house full of musicians. Back in the 1960’s and early 70’s my Dad was the lead singer and sax player in his very own dance band, The Four Sounds. My mom played the piano. A few years later, at the ripe-old age of 13, my older brother Marty joined the family band as the drummer. Music was in our family and in our blood.

Me? As the youngest member of the family, I was the aspiring trumpet player – too young to play in The Four Sounds, but apparently not too young to ‘work’ for The Four Sounds. I was the “Band Boy”. A position my dad created out of thin air in hopes of making me feel a part of the family plan.

As the Band-Boy, my job was to haul equipment from Dad’s station wagon (picture Clark Griswold’s station wagon in the movie, Vacation) into the place they were playing (usually a local Country Club). After setting up, they’d start playing. I hung out and listened to Dad play and sing all sorts of songs while at the same time yell at my brother Marty for not keeping a good back-beat. By this stage of the game, Mom had resigned as the piano player and as Dad’s spouse – I was 10-years-old at the time of their divorce.

Dad loved singing the ballads; those soft-spoken songs with great melodies, chord changes and cool lyrics. So cool were the lyrics of these ballads that Dad never got them right. Often forgetting the words (or maybe it was the fact that he never took the time to learn them) Dad would often make-up the words as he sang. But who could notice as crowds of people were drawn to the melody and the performance, not the accuracy of the words and lyrics.

One of his favorites was a song called “Tenderly”. He liked it so much that he made me learn it on my trumpet. I guess a newly divorced Dad figured that forcing his son to learn Tenderly on a trumpet was cheaper than therapy.

Anyway, one day, while helping Dad and Marty load up the family station wagon for that evenings gig, he told me to bring along my trumpet to play Tenderly. I was nervous as a cat loading my trumpet in the back of that station wagon. Looking back, it was the coolest moment of my young life – walking into that country club packing my axe (slang for trumpet). Two hours later, with the crowd fully engaged (that’s a nice way of saying that the majority were fully inebriated by this time), Dad proudly announces to the juiced-up crowd that his ten-year-old was going to come on stage to play the all-time great Ballad, Tenderly…well, you can imagine the thrill for me and the response of the crowd.

Since that life-changing moment, I’ve continued to enjoy great ballads. Problem is; some of the greatest ballads have some of the goofiest lyrics. Take one of the all-time classics, “Send in the Clowns”. (Now I know why Dad used to make up his own lyrics).

Written by Stephen Sondheim as sung by the great Judy Collins, Send in the Clowns possesses a wonderful melody and beautiful chord changes. However, as much as I love the melody, with all due respect to Mr. Sondheim, the song itself contains lyrics that make absolutely no sense. The more you think and visualize the lyrics – “send in the clowns…there ought to be clowns” – the goofier it sounds.

The thought of someone saying, “hey folks, I know what we need to liven this place up…some clowns!”

“Why?” asks one of the guys.

“Because!” responds the annoyed clown-seeker, “there ought to be clowns… so send in the clowns!”

Ok, let’s go with the assumption that in life, “there really ought to be clowns.”

First things first: I think we can all agree that in the real world, Clowns are easy to spot. The typical clown has a big nose, funny hair, flat feet, lots of makeup and dressed…well…like a clown! You understand their goofy antics are just for show – for entertainment. The sillier they act, the funnier it is. After the performance, all of us – including the clowns – go home, returning to our normal lives with no ill or long-term effects as a result of their clownish behavior.

Up to recently, Clowns limited their silly antics to events such as Parties, Amusement parks, Circuses and the like. However, I’m starting to notice a lot of Clowns showing up in the Financial World. Unfortunately for the general public, these Financial Clowns are NOT easy to spot!

{By the way, it’s not just Financial Clowns showing up, but Political Clowns as well…just watch and listen to the nightly news, cable shows, and radio for as much silliness as you can stand}

Unlike your easy-to-spot clowns of the past, the new breed of Financial Clowns is well-dressed and highly articulate (they can really carry a tune). Throwing out untested advice (lyrics that are often made up on the fly like my Dad use to do) to whatever crowd will listen, these Clowns appear to know what they’re singing. Unlike the innocent goofiness of traditional clowns, the financial advice given by Financial Clowns is serious business. Let’s face it, when all is said and done, you’re the one who has to live with the potential consequences of following their advice. These clowns make money whether you do or not!

With so many Financial Clowns on TV, Radio, Print Media, and Internet – not to mention many of them out on the streets representing various financial institutions – how do you spot a Financial Clown?

 

  1. Is the Financial Clown registered as an Investment Advisor? Being registered means that anyone giving financial advice has someone to hold them accountable, i.e. the SEC, for the advice they give. Most Financial Clowns don’t like to be accountable to anyone, that’s why they don’t become registered (they work alone for a reason).
  2. Is the Financial Clown actually working with people in the financial trenches each day to “test and verify” the accuracy of their advice, or are these clowns simply on stage belting out 2-minute-sound bites? In other words, do these Clowns have a vested, long-term interest in truly helping the people they are giving advice to, or is this just for show?
  3. Does the Financial Clown invest in the products they tell you to invest in, or is it one of those gigs where it is, “do what I say, not do as I do?” If they say to invest in no-load growth mutual funds, ask to see ‘their’ no-load growth mutual fund statement. It’s been said that a well-known Financial Clown tells followers to invest in growth mutual funds, yet most of his/her net worth is in individual stocks and bonds, not growth mutual funds. Apparently, what’s good enough for you may not be good enough for them.
  4. Does the Financial Clown have training from various financial resources and experts in the financial field or is their advice based on their own past personal experiences. For instance, it’s heart-warming to hear about a Financial Clown who went broke and learned a painful lesson, but that doesn’t mean you put your faith, trust and life savings in them. I had surgery on my nose (another very painful experience), but that fact alone does not make me an expert on medical issues.
  5. Listen closely to their lyrics. Do the Clown’s words and attitude appear dogmatic (it’s my way or the highway) and/or defensive (how could you ever question my advice?). After personally working in this business for nearly 30 years, here’s what I’ve learned: there is NO perfect investment, and there is NO terrible investment. Anyone that tells you otherwise is a Financial Clown. All financial products, tools and strategies have their place. The key is finding someone who can assist you in finding what’s right for your particular financial situation.
  6. To-good-to-be-true statements like: “we can double your money in 5 years,” OR “over the last 20 years, the stock market has done 12%, so let’s assume in your plans you’ll make that too!” OR this index annuity has a cap of 19%” all expose Clownish advice.
  7. Financial Clowns hate to be questioned. It’s YOUR money! You have every right to ask questions of Financial Clowns. It’s the only way to know if they are working in your best interest or theirs. Someone that acts annoyed at your questions (defensive) has something to hide or feels that you really are an idiot for asking such questions (in other words, how can you question their expertise). Listening closely to an advisor responds to the question, “how much do you make in terms of fees and commissions” is a real laugher…try it out for the fun of it.

 

Spotting Financial Clowns isn’t easy. It will require discernment on your part. Financial Clowns are crafty little devils – they’ll do their best to look just like us. And while there are certainly many admirable and well-intentioned financial advisors, be sure you take the time to learn how to separate the ones who truly know the lyrics from the ones who are just entertaining.

In the meantime, I’ve got to run…I’m excited about a new song I’m learning to play on my trumpet called “Send home the Clowns.”