Can we stop pretending any financial advice is ‘unbiased’?

Sometimes I like to sit in the morning, sip my coffee and think about a time I was blissfully unaware of the 60 different financial designations that exist here in Canada.

It’s fun to rant about the financial industry, but that’s not really what I’m in the mood for right now.

Right now, let’s assume that most of the people holding those designations are good people who are trying their damnedest to help folks with their money.

But we all have different ideas about the best way to do it.

Me… I’m in a camp of people who call themselves ‘fee-only financial planners’.

We’ve decided that the best way to help people with their money is not to be in charge of selling any products, that way our advice isn’t influenced at all by the products that we could sell (things like insurance, mutual funds, or credit sources).

We offer ‘unbiased’ advice.

But… do we actually?

A not so comprehensive list of all my biases….

My background is farming and the arts, both industries full of strong willed, independent weirdos.

It’s built a pretty solid bias in me against conventional thinking. Sometimes that helps me challenge norms, but sometimes it makes me slow to accept general knowledge that’s been around a long time for a reason.

That background has also made me deeply skeptical of solutions that aren’t hard work. I have a strong association between things of value and how difficult they are. This makes me lean towards financial solutions that have extra legwork, and shy away from ones that are easy.

I also have a bias against the very rich. Don’t really know where that one comes from, but I’m far less interested in offering them help, than someone with a lower income.

And lastly let’s add to the list that I have a bias against ‘free money’. Things like grants and scholarships. This one I fully admit is bizarre, but it’s true. I have repeatedly avoided applying for these things, because somehow it feels like ‘cheating.’

There are a ton of factors that affect my ‘objectivity’.

I don’t sell financial products, but I’m far from unbiased.

Biases matter, but disclosure matters more

I don’t believe anyone is unbiased, and it’s starting to annoy me that we pretend we are.

Bias is a real problem.

It’s a problem that the frontline bank workers that so often interact with people have a strong push to sell and not offer broader help and support.

But it’s a bigger problem that those biases aren’t disclosed and recognized.

it’s not so much the problem that they exist… but that they aren’t talked about and understood.

And by claiming we’re unbiased we’re walking headlong into the same problem.

The best service we can offer our clients is to own our biases

Last week I came face to face with a new bias, a preference to not engage with certain financial products. I spent hours trying to figure out a solution for my client that was made up of hard work and discipline, but in the end… I found myself back with a product that would be the most helpful.

One that, even though it had drawbacks, would probably be the best fit.

And I hated the moment (about 3 hours in) when I realized that it was my own personal bias that was driving me to search for a solution that didn’t naturally exist.

It sucked to face that in myself.

But only by facing it could I get past it, and ultimately offer the best help to my client.

I am not un-biased.

I was raised a farmboy, trained an opera singer, and indoctrinated as a fee-only financial planner by a group of radical and wickedly smart women.

Every one of those experiences has tilted my world view and instilled beliefs that are part of the way I try to help people with their money.

I think that those of us who have a passion to help people with their money have to stop thinking of ourselves as unbiased – whether we’re part of the big financial institutions, personal finance bloggers, or independent planners. We have to challenge ourselves to really recognize our natural tendencies and the solutions we lean towards.

We have to own our biases and acknowledge when they’re coming into play.

Instead of pretending that they don’t exist.

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