A Twitter war that began in late May escalated over the first weekend of this month between radio host Dave Ramsey and fee-only financial advisers who criticized the author of financial advice books for telling Americans to expect a 12% return on investments and for promoting commission-based brokers.
Adviser Carl Richards said that Mr. Ramsey's advice is “dangerous” and “crap” in one exchange, while planner Carolyn McClanahan said in a May 30 tweet: “I despise his investment advice.”
Mr. Ramsey responded to their comments, and others, with this: “I help more people in 10 min. than all of you combined in your ENTIRE lives #stophating.”
That response really got the Twitter feed buzzing, and other fee-only advisers jumped in to defend their colleagues.
Adviser David Grant tweeted that Mr. Ramsey had been a role model of his until he “lashed out” at Ms. McClanahan.
“Guess you have to have to change your hero at some point,” Mr. Grant wrote.
Mr. Ramsey, who now has taken down certain exchanges from his Twitter feed, told Mr. Grant that Ms. McClanahan had “attacked me continually” and that he was just responding.
“Don't want to get bit by the big dog, stay off the porch,” Mr. Ramsey tweeted.
But Ms. McClanahan said that June 1 was the first time she had ever mentioned Mr. Ramsey in a tweet.
Mr. Grant also asked whether the investment professionals that Mr. Ramsey recommends on his websites pay for that endorsement, but Mr. Ramsey didn't respond.
The host of the self-syndicated “The Dave Ramsey Show” radio program didn't respond to a request for comment about the Twitter exchange and his adviser recommendation program.
But the website FAQ section does say that endorsed local providers pay a fee to be included in the program, calling it a “form of local advertising.”
12% RETURNS?
In addition to paying a fee, the professionals must be registered with the Financial Industry Regulatory Authority Inc., the brokerage industry self-regulator.
“Every adviser's main problem with Ramsey is him telling people they can expect 12% returns on investments. That is unconscionable,” Ms. McClanahan said in an interview.
“If someone is near retirement and they are 100% in stocks so they can reach for that 12%, that's scary,” she said.
One supporter of Mr. Ramsey, Brandon Montes, tweeted June 2 that the 12% isn't Mr. Ramsey's core message.
Trying to live debt-free and living on less than earnings are the central messages of his program, he wrote.
“The Dave Ramsey Show” is a popular three-hour radio program about life and money. He has more than 385,000 followers on Twitter.
