I had an interesting experience in a blogger networking group and it has encouraged me to write this post. I may ruffle some feathers and lose some ‘friends’, however, if I save one person from bad advice I will consider it a win.
“The truth or falsehood of all of man’s conclusions, inferences, thought and knowledge rests on the truth or falsehood of his definitions.” – Ayan Rand
I recently had the opportunity to read a fellow blogger’s post. I generally enjoy this blogger’s posts and try to share them whenever possible. However, today I noticed a factually incorrect statement that could potentially mislead readers. I agreed with the overall tone and conclusion from the post, so, normally I would just let sleeping dogs lie. Despite that, I value this blogger as a connection and I felt that pointing out the error was the correct thing to do. The response I received was less than eager to address the error than I had anticipated.
As a result, I would like to share with you 9 reasons the financial advice you are reading may be wrong.
- Experience isn’t everything, but it’s a lot more than opinion.
I have talked about relevant experience in the past. The Blogosphere is ripe with bloggers that have worked in finance for a few years before becoming a blogger. Certainly a few years’ experience in finance will give a blogger a leg up on the average, untrained individual. However, the question remains on what is the quality and quantity of that experience.
Most firms and banks do not hand over the most complicated cases to rookie employees. Longevity allows for a perspective that is gained and refined over time. It’s about understanding that having met with over 7,200 people over the course of nearly 20 years for financial planning you become aware every situation has to been considered or dealt with. It’s about knowing that events that only happen a few percent of the time of the time, will still happen hundreds of times and need to be planned for. There will be a learning opportunity, and it’s enough that experienced people appreciate the statistical nature of the business, and be more inclined to worry about it versus the rookie employee who doesn’t know norm from anomaly yet.
- Read all of the print, not just the fine print.
Blogs are not regulated. Most are not providing financial advice. No one is checking blogs for accuracy or balance, unless the blog is written by a financial firm or advisor.
We are becoming familiar with fake news. I’m sure you may have at one time needed to visit Snopes.com to verify some outlandish claim like “Hilary Clinton is really a reptoid.” A recent study by MIT found fake news was more popular on Twitter than the truth. This same trend happens with content that is factually incorrect as well. A catchy headline and a pretty picture can catch people’s eye and it is easy to share that post without digging into the meat of the article. Social proof is a power tool, and before anyone realizes it, a piece of information can become popular without any consideration of the facts.
- Caveat emptor (buyer beware).
Several months ago, I had an email exchange with a prominent journalist who writes pieces for some of the bigger, more well-known publications. He was looking for validation on an opinion-based idea he had. I could tell from our exchange I wasn’t giving him the quote he was looking for. I recall that I finally said to him, “Look, no broker dealer is going to let their reps do what you’re proposing.” I will never forget the response I received back: “It’s ok. My audience is do-it-yourselfers.”
I’m not sure producers of content should be giving advice. Those tasked with protecting consumers wouldn’t approve. There’s exceptions to almost everything, but it’s hard to fit all off those nuances into a short paper article.
- The game might be rigged.
Let’s say that a blogger wants to sell workout DVDs that teach how to get a body like a sprinter. The blogger’s premise is that sprinters are better athletes than long distance runners. To prove their hypothesis, the blogger chooses to compare two athletes and test their athleticism by comparing how much weight each can squat lift respectively. The standard was set by the producer to stack the results. In other words, the game was rigged from the start.
We see this in financial context as well. Definitions and examples get used to stack the results.
- Opinions are not facts, either, no matter how loudly stated
One great thing about blogging is that people are free to share their opinions and insert their personalities into the content. Keep in mind, however, that opinions are not facts. It’s ok to have opinions and to back up your opinions with facts. It’s not ok to pass off your opinions or the opinion of others as fact. Value and cost are subjective; what one person may consider an unnecessary expense, someone else may consider a money-saving measure.
Note: Presence of a quote does not make content more ‘objective’.
- Experts may be fake
Over the last week, the financial content community was set abuzz over finding out student loan expert, Drew Cloud, was fake. It wasn’t just small bloggers that were hoodwinked; Drew was quoted by the likes of The Washington Post and CNBC. As it turns out, Drew was a fictional character fabricated by a student loan refinancing company. It’s not surprising that someone on the internet turned out to be fake. The amazing part was the heroic efforts that the company had to use to pull off this ruse. Sadly, this is unlikely to be an isolated incident. Influential personalities are being used more and more by companies with wares, goods or services for sale that are looking to cash in by using the influencer craze.
- Research methodologies may be flawed.
The success of online content in the search engines is largely dependent on the amount of backlinks and social media shares a piece of content receives. It is, in large part, for this reason that producers of content network together. When bloggers need sources for information, they will often reach out to their networking groups and ask for related posts. If anyone else in the group is guilty of the mistakes listed here, it may not be caught and incorrect content can inadvertently get endorsed.
This can also fall under the Buyer Beware, but more so, “Blogger Beware”.
- “You don’t know what you don’t know.”
When I was in the service, we used to use the mantra of “you don’t know what you don’t know” as a challenge to improve our plans. We used this concept to challenge our beliefs and assume some unknown event could occur that we would otherwise be blissfully unaware of. The idea was to find a plan’s biggest weakness until that weakness was no longer a liability. The objective was to not just settle at making a plan “bullet-proof”, rather, it needed to be “bazooka-proof”.
This concept of not knowing what we don’t know applies to the internet today. The internet is a wealth of information, however, at the end of the day, our access to information is limited to our own biases and experiences. You cannot search online for things you are unaware of.
- The truth is not always popular.
Social media makes it easy for people to interact with online content in new and unique ways. We can leave comments on blog posts, upvote or downvote on Reddit, or share content on Twitter and Facebook. The issue is that authors of blogs can moderate comments and squash dissension. Reddit has a bunch of wonderful attributes, however, being supportive of the minority views isn’t one of them. Ideas and concepts that are outside of conventional thought are not likely to get the social media attention and shares. Because of that, many content producers have started adopting populist messages. This is a flaw with “group think”, or a herd mentality, to move forward. Eventually, someone challenges the status quo. It’s the unpopular opinion. The problem remains that websites and blogs are monetized mostly by the volume of traffic received, which means that the unpopular opinion, even if based on truth, is uneconomical and therefore not a profitable stance to take.
“Being in a minority, even in a minority of one, did not make you mad. There was truth and there was untruth, and if you clung to truth even against the whole world you were not mad.” -George Orwell
Standing apart from the masses
I’m not sharing this information to criticize financial blogs, or any blogs for that matter. I have two objectives in writing this post:
- I want people to get accurate and balanced advice that works for them and their situation.
- Secondly, I want to move financial planning forward.
My goal is for financial planning to become a science similar to medicine. For life and financial planning to become a science, we have to challenge the status quo, and hold our peers to a higher standard.