Scott Pape, better known as the Barefoot Investor, has announced he is shutting down one of his businesses.
Pape will be closing down Barefoot Blueprint, his subscription-based investment newsletter that includes Pape’s personal tips on economics, shares, property, superannuation, managed funds, fixed interest, and cash, and can include a number of bonus research features and special reports.
In an email to his subscribers, Pape wrote: “Okay, so this is huge: I’m closing down my business.
“Really. Not. Even. Joking.
“No, this ain’t some clever clickbait-y thingamajiggy: I’m really closing down the Barefoot Blueprint.”
He explained that the decision came after a date night a year ago when his wife Liz mentioned he’d sold a million copies of his book.
“‘What’s next?’” she asked.
Pape took a swig of his beer (“for courage”) and and told her his plan to open up his own not-for-profit financial counselling service.
It was so that those who were vulnerable to sudden events that have disastrous consequences for your finances – such as a father diagnosed with cancer, or a mother fleeing her husband with no cash on her, or a child in debt and depressed will “sit down with us”.
“It’s meaningful work … and it’s desperately needed.”
Why does Pape need to close his business to open another one?
In order to run his not-for-profit counselling service, he has to surrender his financial services license, he explained.
Pape has touted Barefoot Blueprint as an “underground finance club you’ve never heard of” and has described it as “Scott’s Inner Circle”.
Instead of providing personal financial advice, Pape publishes financial advice of a general nature to a broad audience.
“When we answer questions from readers, our advice is of a general nature only and is not a substitute for advice from an independent financial advisor,” Pape wrote in a section at the end of the email.
To open up a financial counselling service, according to Australian regulation he has to give up his financial services license – which gives him the capacity to sell products – because there’s a conflict of interest.
Finance experts can’t make recommendations if they’re also selling finance products, and the regulatory landscape of financial advice in Australia has become much more stringent following the banking Royal Commission.
At least one of Barefoot Blueprint’s dedicated followers has been dismayed at the news. Reddit user danstanf89 took to Reddit earlier this week, saying that Pape’s decision left him in a “sticky situation”.
“I was shocked to receive the email yesterday and be notified it is closing down in 12 months,” he wrote in a Reddit post.
“The service has been extremelly [sic] valuable to me. As a blue collar worker, the share insights and general financial advice have made/saved me a small fortune over the last 7 years.
“The Blueprint closing does leave me in a sticky situation,” he wrote.
“I have 8 of the stocks recommended, and Scott and Mikes valuations/company updates were my barometer of how the companies are performing.
“I'm not sure if I should take my gains and invest them into more index funds now that I've lost my most reliable analytical resource. I'm not sophisticated enough to analyze them myself.”
Other users expressed regret that, due to regulation designed to stymie miscreant financial advisers, Pape would have to shut down Barefoot Blueprint to set up his counselling service.
“Seems a pity for someone with skills, knowledge and experience to be forced out of the sector while others with dubious history remain,” AspiringGuru commented.
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