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In defense of Suze Orman

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Zac Bissonnette

Suze Orman is in a federal court in Oakland defending herself against civil fraud, breach of fiduciary duty and conspiracy charges related to a long-term care insurance policy sold by her financial advisory business in 1999. It’s a convoluted case, but the gist of it is this: The Suze Orman Financial Group of Emeryville, California sold a long-term care insurance policy and there was confusion about what it covered and the policyholder sued.

The brochure specified that in order for the policy to pay out, the caregiver “cannot be a member of your immediate family living with you.” but the fine print in the actual contract specified that payments couldn’t be made to family members, regardless of where they lived.

When the policyholder got sick and her family cared for her, CNA Financial Group — the issuer of the policy — refused to pay up. Forbes reports that “The complaint, which seeks unspecified damages from CNA, Orman, her firm and others, quotes repeated advice in Orman books to buy long-term care coverage.” Orman’s lawyers say the case is without merit.

The case itself is not that interesting, but Forbes’ decision to cover it is. Forbes writer William P. Barrett adds to the piece, somewhat clumsily, that “At the time, Orman, now 57, portrayed herself to the public as a practicing financial planner. But a contemporaneous Forbes story said she hadn’t done such paid work in years; her financial services earned income was coming mainly from selling insurance. Our story pointed out a number of other false statements in her published author’s bio, which was quickly changed.”

And that has precisely nothing to do with the lawsuit, but who cares about that? Barrett adds at the end that “The lengthy New York Times Magazine profile of Orman published Sunday calls her “the best-known financial adviser in the country” and “a trusted national adviser.” It makes no mention of this litigation, which has been pending in the courts against her for several months.”

It makes no mention of the lawsuit because the lawsuit has nothing to do with anything. People who run businesses that sell financial services like insurance end up in litigation from time to time. Who cares?

For a combination of reasons — jealousy, sexism, elitism, and arrogance come to mind — a number of financial journalists have made mini-careers out of Suze-bashing. Maxed Out director James Scurlock recently wrote a piece titled If You Knew Suze Like We Know Suze ,You wouldn’t listen to her advice — and then failed to explain what part of Suze’s advice is so bad, other than a trashing of dollar-cost averaging, a fairly generic investing strategy recommended by most financial advisers. He also complains that her emphasis on personal responsibility is flawed because “Although study after study has shown that personal bankruptcies are caused primarily by catastrophic events like divorce, job loss, and, above all, medical bills and that most of us are struggling with a gap between our income growth and the soaring cost of necessities like housing, Suze tends toward psychological causes that invariably blame the victim.”

Well no, Mr. Scurlock, it’s not that simple: Most personal bankruptcies are precipitated by “catastrophic events” — although job losses, illness, and divorce are pretty common — but might have been prevented by careful financial planning, frugality, and saving. That’s why Suze is such a big fan of emergency funds, something that Scurlock fails to mention. There are number of factors that lead to financial ruin, and poor financial planning is present in most cases, even if the straw that breaks the camel’s back is a job loss or illness.

In case you can’t tell by now, I love Suze Orman and here’s why: She gives solid, conservative and reasonable financial advice and delivers it in a format that appeals to people who otherwise wouldn’t want to hear it. Suze Orman is to finance what Yo Yo Ma is to music: Purists might be annoyed by the marketing and occasional pandering but the bottom line is it brings a wonderful thing to people who otherwise never would have heard it.

There are plenty of charlatans out there offering bad advice and charging outrageous sums for it. Suze isn’t one of them. Suze offers good advice at reasonable prices — You can watch her show for free and get her books at the library. She deserves praise. Save the hatchet jobs for people like Robert Kiyosaki.

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In defense of Suze Orman

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