Do you consider yourself a discerning person when it comes to the financial services industry?
Whether you do or do not, we can always improve a skill. Which means, you might be interested in a make-believe course I’m not offering (but maybe someday will) entitled “Calling Bullshit in the Age of Big Finance.” My fictitious course is inspired by a real course offered at the University of Washington named “Calling Bullshit in the Age of Big Data.”
The opening paragraph of Calling Bullshit’s course description (the real class) reads:
The world is awash in bullshit. Politicians are unconstrained by facts. Science is conducted by press release. Higher education rewards bullshit over analytic thought. Startup culture elevates bullshit to high art. Advertisers wink conspiratorially and invite us to join them in seeing through all the bullshit — and take advantage of our lowered guard to bombard us with bullshit of the second order. The majority of administrative activity, whether in private business or the public sphere, seems to be little more than a sophisticated exercise in the combinatorial reassembly of bullshit.
If Calling Bullshit in the Age of Big Finance actually made it to a classroom, I’d borrow from UW’s course description because it’s great. And adapt it so it reads:
The financial world is awash in bullshit. Bankers and corporate lawyers are unconstrained by facts. Financial legislation is conducted by bank lobbyists. Credit rating agencies reward bullshit over analytic thought. The financial media elevates bullshit to high art. Financial advisors wink conspiratorially and invite you to join them in seeing through all the bullshit — and take advantage of your lowered guard to bombard you with bullshit of the second order. And dupe you into paying outlandish fees for financial products you don’t understand. The majority of financial services activity, whether in retail banking (think Wells Fargo) or investment banking (think Lehman Brothers), seems to be little more than a sophisticated exercise in the combinatorial reassembly of bullshit (think phony bank accounts, mortgage-backed securities, credit default swaps, and sketchy variable-interest mortgages).
And the learning objectives of Calling Bullshit in the Age of Big Finance would be something like this:
If a financial advisor wants to manage your money, charges anywhere close to 1% and justifies that as a reasonable management fee, you know to call bullshit.
If you ask a financial advisor what his fees and potential conflicts of interest are and he doesn’t give you a clear, itemized menu of said fees and potential conflicts of interest, you know to call bullshit.
If you ask a financial advisor what are all the possible ways he can make money off of you and he doesn’t give you a clear, itemized menu of said revenue sources, you know to call bullshit.
If a financial advisor tries to downplay the importance of investment costs on your overall portfolio return, you know to call bullshit.
If a financial product is advertised on TV, you know to call bullshit (except in rare cases).
If an investment manager tries to convince you his investment strategy can “beat the market,” you know to call bullshit.
If a banker tells you debt does not make your financial life amazingly more complicated, you know to call bullshit.
If a banker or financial salesperson tells you debt is not a screaming emergency, you know to call bullshit.
If anyone tells you taking out a mortgage (debt) is automatically a better financial decision than renting and no cost/benefit analysis between the two is necessary, you know to call bullshit.
And by course completion you should be able to sniff out bullshit in your dealings with banks, brokerage firms, insurance salesmen, and others with the same precision as an airport drug-sniffing dog.
Which means by course completion you should have developed the skill to spot bullshit successfully in the financial services industry. A skill so important it can prevent you from losing thousands if not millions of dollars in financial fees and lost returns. And from being a money sucker versus not.
Real talk, being able to spot bullshit when it comes to money matters is a real skill. And it’s one of the most important skills you need to reach Financial Freedom because there is an insane amount of bullshit in the world of finance. If you invest in hanging out in Financial Freedom circles like here at Gilbert Index, the Bogleheads wiki, the Bogleheads forum, Mr. Money Mustache, JL Collins, among others, you’ll find yourself building up your bullshit detection skills.
And real talk, if you’ve been impacted by bullshit in the financial services industry, remember to submit a complaint through the complaint system of the Consumer Financial Protection Bureau because doing so might resolve your issue and you might help others with a similar issue.