The above statement may seem an extreme categorization of who an expert or adviser is, but it captures the essence and lessons thereto, especially why many people have seen their fortunes ruined by those so-called trusted experts and advisers. A study of every financial crisis has shown that the greatest losers are those depending on experts and advisers to make decisions concerning their investment. Those who could make such decisions and calls themselves often escape unscathed or with minor financial bruises – because in such situations timing is critical for survival.
There are experts in every field of endeavour and we should recognize and consult them when necessary. However, there is this tendency to overrate or overstate their worth or importance. Except in some very specialized fields such as medicine, law, accounting, we have a big role to play in what happens to us; even in those, we can still take care of the basic issues to be able to use the advice so offered.
In fact in medicine, which is the most complex of all professions, there are people who defied professional opinions of experts for their health needs and got positive and better results. One of such was Andy Grove, the co-founder of Intel Corporation. About six years after founding the company and when they were still developing the micro-chip technology, he was diagnosed with cancer and given less than a year to live. Expert after expert held the same view but he refused to accept their verdict; it was not an issue of faith as most people here would surmise.
As a scientist with a PhD in chemical engineering, he took a-three months leave to study the ailment and developed a treatment regime for it. He lived another 19 years and made Intel a global brand. It was the knowledge he got from the study that saved him; if he had depended on the experts he would have died before his time and Intel may never have been what it became.
Also there is a second point: when seeking for advice who do you go to; the best or the cheapest? People who take their money seriously go for the best, which is usually expensive but you are guaranteed a better deal because such people have a reputation to protect. When we have a medical or legal issue we seek the best people we can afford to handle it because we neither want to die nor go to jail. But when it comes to our money anybody qualifies to advise us, and in the process we lose our scarce resources.
In 1998, the Economist magazine published a survey on consultancy – which is the field or vocation of most experts and advisers – and came to the inconvenient conclusion that;”They are ordinary people saddled with tasks and responsibilities we are either afraid or unwilling to take. They are the best people to take the blame for our failures by acting on our behalf”. Also Mr. Victor Osadolor of UBA, once told the story of how they, then in STB, saved a whooping N70 million for a three month effort.
In 2001, the bank wanted to restructure and rebrand, and invited some consulting firms to bid for it; the lowest bid was N70 million. Now that was a huge sum for a bank that had just been revived. Then their boss, Mr. Tony Elumelu delivered a mandate thus: These people were our mates in school and banking profession before they moved to consulting; what makes them better than us? He set up a committee and gave them a marching order to produce a strategy within three months; and they did. Three years later, the bank acquired UBA, the third largest bank in the country at the time.
Now don’t get me wrong: Some of these people are very brilliant and highly intelligent. I have met some of them and even trained under them. They are good, but only because of their high level training. Like Andy Grove and the STB people, you can know what they know if you apply yourself to learn about it.
The point is this; be careful who you entrust your hard earned money to; we must exercise utmost care in choosing them if we have to. For instance, the mutual funds make a lot of promises which most can hardly keep. They sometimes promise as much as 45 percent annual growth on investment. However, some of them don’t even invest in the stocks they recommend. They just want to have your money and get their commission.
Anthony Robbins said, “some of the people may sincerely think they are helping you, but people can be sincere and sincerely wrong”. This is important: Never make your marketer or broker your adviser; they are mercenaries just after their commission. They are like banking officers; they will never tell you to take your money when the bank is crashing. You have to learn the bitter truth yourself.
Perhaps, my personal experience with them can help here. In 2007, I made some investments in mutual funds. It was those bull period on the NSE and everybody was either marketing or investing. This company came to me promising financial Eldorado. So I parted with N150,000, preferring it to direct investment. What I foolishly forgot is that the promised returned was based on the performance of the stock exchange. Not long after, the bubble burst.
First the company quietly suspended operations as investors besieged them, only to resurface at a different location after two years. On the day I visited their office, the scene was heart-breaking. At the staircase I met this soldier moaning and cursing, which prepared me for the worse. The reception was like a funeral parlour with people – men and women – mournful and wearing long faces.
Brandishing my certificate in the face of the staffer, she calmly informed me like an undertaker, which in actual fact she was at the moment, that my money was invested in some insurance firms and they have collapsed. End of story! I went home to lick my self-inflicted wounds. There are other such experiences I know of but unnecessary here. Yet they have their uses. But the point is that you should not leave your investment in the charge of others without knowledge of how it works and the possible outcome to prepare you for the worse.
So it is good to consult and use advisers; but it is better for you to also know how the system operates so that you can retain some control over what happens to your money. “If you know your limitations, you can adapt to succeed; if you don’t know them, you’re going to be hurt”.