Has Personal Finance Goddess Suze Orman Lost Her Luster?

Famous for flogging the financially feckless, celebrity personal finance guru Suze Orman may have finally fallen from her pedestal. In fact, with the controversy surrounding the January 2012 debut of her fee-laden prepaid debit card, she set up what is known in her own TV-lingo as a "smackdown" – a come-to-Jesus moment of truth. Only this time, Orman is on the receiving end. Media outlets from the New York Times to Fox Business to the Wall Street Journal have run scolding pieces on the woman whose FICO-4-You Kit and other products are supposed to deliver us financial freedom. Former supporters have dropped her like a hot potato. Flurries of nasty tweets have erupted between Orman and her detractors. How did this happen and what is the reality behind the perma-tanned façade that Americans have come to idolize?

Suze Who?

Peruse Orman’s Wikipedia page and you will find an appealing Horatio Alger story of a Chicago-born girl raised by working-class Jewish immigrant parents; a girl who rose to become one of the most powerful media personalities in America. You will also discover something curiously absent from the background of a person on Time magazine's "100 Most Influential People in the World" list for her work as a financial expert; namely, a formal education in finance. Orman, you'll find, got a B.A. in social work and worked as a waitress (until age 30, you can learn elsewhere) before landing an unlikely job as a stockbroker at Merrill Lynch. Not the usual path to financial expertise, but what of it? There are many places to learn besides a classroom. The trouble is, teasing out the details of Orman’s education is a tricky business.

In her first book, The 9 Steps to Financial Freedom, Orman recounts life lessons about money. One is a touching tale of her hard-working father, once burned in a fire trying to remove a safe from his store, who dies peacefully having achieved wild success with a new store and having provided for his family. Readers are to be inspired by his never-give-up tenacity. But years later, Orman admitted that her father committed suicide on Father’s Day, broken by financial worries. When questioned about the discrepancy, Orman brushed it off: “Who knows what I said in the book?”

Back in 1998, Forbes reporter William P. Barrett questioned the credibility of the rising star, who had just made the bestseller list for the first time with 9 Steps. He noted that some of her advice was obvious (use the self-service pump at the gas station!) if not downright silly (search your closets for missing money?), and he disdainfully recounted Orman’s self-promotion in the form of plugs for charitable giving on PBS. Barrett cast doubt on the nature and duration of Orman’s financial planning career and pointed out that her income mostly came from selling insurance, a product which, he noted ominously, tended to receive a great deal of attention in her books.

Sour grapes from the male-dominated finance world? Possibly. But then came Mark Veverka at the San Francisco Chronicle, supporting Barrett’s view that Orman had been misleading and documenting the disturbing obfuscation of her publicist. In the early 2000s, financial journalist Chuck Jaffe expressed frustration with what he considered Orman’s conflicts of interest and described her financial advice as too simplistic and extreme in radio segments and columns like “Why I hate Suze Orman’s advice.” These alarms did little to stop Orman’s meteoric rise to guru-status. Her defenders admired Orman's characteristic tough love stance and found her old-fashioned instructions to get out of debt and live below your means to be just what a spendthrift America needed. The woman was well on her way. And the financial crash, which felled so many, only served to increase Orman’s fortune.