The financial media continues to disseminate discredited advice because its advertisers — the securities industry — pay it to do so.
What Dan Writes
For some advisors, a key problem is generating inquiries. In my experience, marketing efforts tend to be a hodge-podge of activities. They often include social media, videos, print advertisements, referral programs, podcasts, events and radio programs.
If there’s one thing almost all financial experts agree on, it’s that low costs favorably impact returns. In this article, Morningstar concludes: “firms with high fees are unlikely to offer above-average performance. Low-fee funds give investors the best chance of success over the long term.”
Our brains are basically lazy. When you evoke images, you engage others. If your words don’t generate powerful images, the brain has to work hard to “decode” what you are trying to convey.
I get depressed whenever I read an article about advisors who lose a large amount of money belonging to athletes. This one is typical. An ex-financial adviser apologized for losing $43 million of his clients’ money. All of his clients were NFL players.
There’s a quote attributed to Sean Lennon (the son of John Lennon) that reflects my current thinking about the future of the advisory business: “We live in a pretty bleak time. I feel that in the air. Everything is uncertain. Everything feels like it’s on the precipice of some major transformation, whether we like it or not.”