Because the best things in life are free, aren’t they?

Unless of course, we are talking about financial advice…

Bob is a plumber. He has been a plumber for thirty years. For thirty years he has been paid by others to fix their plumbing problems. He is a professional plumber. One day, bob decides to buy a camera. Besotted with his new toy, and enamored with the beautiful photographs that he has taken, he decides that a change is in order. Bob quits his job. Is bob a photographer now?

No. He is a plumber with a camera.

There are no shortage of amateur investors online spewing out anecdotes shaped like advice. I fully appreciate that the beginnings of an investing career are exploratory and the way is paved with trial-and-error mistakes.  Sharing these experiences can be therapeutic, and writing down one’s thoughts when learning is an academically sound concept. If others in a similar position however mistake this solidarity for credibility then there will be problems, and money will be lost.

I see you, bitter financial adviser! You are just pissed because you’ve been rumbled, and the working man now has all the tools he needs to manage his own financial destiny without paying fees and commissions.

A natural knee-jerk. Occupy Wall Street and put all of your fiat into Bitcoin. Move all of your un-encrypted communications over to Protonmail and live on a Tibetan mountainside. You win. But hear me out first.

Do you use an amateur accountant for your tax returns? An amateur doctor for your surgeries? The word “amateur” is not in itself derogatory. It simply denotes a difference to the “professional” who gets paid for doing the same activity. So why do they get paid? A recognised skill, specialism or qualification meaning that they are good at what they do- to the extent that other less-qualified people are willing to pay to have it done for them. I could teach my child about Math. But I do not. I leave this to their Math teacher. This is not a matter of pride, and is swiftly concluded by common sense.

Now, when it comes to investment management, everybody is an “expert”. Nobody wants to pay anybody else, because paying X to make 2X feels like a loss if you needed help. Especially if it means paying the greedy suited snakeoil salesman who’s business card abbreviates his title to “financial advisor“. This feeling has been capitalised upon by a small group of “bloggers” offering informal financial advice online; some to great success. Commonly they are unqualified, unregulated, have never worked a day in a financial function, and are employed as English Teachers (or often seems the case in Japan and other parts of Asia). There is absolutely nothing wrong with this. I respect the hustle. That said, we are often less forgiving of “doctors” and “therapists” who dispense treatments with fake or non-existent credentials.

Commonly finance bloggers will share content and promote eachother on their blogs to reinforce their legitimacy and ensure the continuity of the circle-jerk (much in the same way that an essayist will quote his academic peers when making a statement). Why? For the exact same reason that your banker puts in the hours in his suit, punting his snake oil/agent orange/anti-aging skin cream- because it makes money. The difference being, you know that your adviser works for money, as does your doctor, as does your dentist, and your son’s piano teacher too. The online finance guru sells a new brand of snake-oil (likely optimised via blockchain technology, marijuana stocks and crowd funding). They siphon and filter their engaged readers down until they are left with a small group to whom they can recommend something “much better”, “much cheaper” or “without any commissions”. Are they being paid to do so? Does a bear shit in the woods? Is my wife concerned by my over-use of soy sauce? Is your o-shigoto taihen?

If you are having a sleepy Sunday then why not do some reading into the posterboy for DIY investing- “Andrew Hallam” the “millionaire teacher”, and his relationship with AES International. Andrew, everybodys favourite unverified millionaire come financial expert, hates everything that doesen’t lead to AES International. AES are a non-partisan financial advisory run by an ex-army boy from the UK. When they are not busy providing impartial opinions on financial products they are busy playing whack-a-mole with their dirty company history of burning down the pensions of British people in foreign countries for profit.

Bloggers often espouse strategies for retirement planning– despite not being retired themselves. Their superlative blog posts decrying the financial industry are their own retirement strategies, as you invariably find yourself kicked down the line and introduced to another company, and another product that will make everything better.  Again, I do not begrudge them hating their jobs, and wanting to be out of the ratrace as soon as possible- despite their spurious methods. This is the financial services equivalent to a classic scam whereby victims are hit twice by the same scammer. They lose all of their investment, and are told that the whole thing was a scam (they are in fact told by the scammers themselves, acting as a third party!). The scammers then circle around a few months later claiming to be part of a group filing a claim ‘against the scammers’ or something similar, stating that there is a high chance for them to claw back some of their losses. Sounds great, John. The catch? They have to pay X thousand dollars in legal fees or something similar. Sadly, they do not get contacted again.

If you think working with a professional is expensive, try working with an amateur.