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To be blunt, there is deception all around us. The primary presidential elections are a perfect example – whether it is Republicans debating with Republicans, Democrats questioning other Democrats, or Republicans and Democrats fighting each other, there is so many half-facts and conflicting information that it is impossible for everything said to be true.

There is an equal amount of deception in the financial service industry. Whether you are watching CNBC, reading Forbes Magazine, or listening to a local salesperson promote his financial product, it is hard to believe we are ever getting the complete story from an unbiased perspective regarding any personal finance issue.

Deception is frequently used to strengthen one’s agenda. An agenda can be supported by drawing attention to specific facts, or reinforced by drawing attention away from less desirable facts.

Hiding Good News in Deceit

The reality is there are always some parties that don’t want us to know the good news happening around us. For example, financial television mediums are dependent on constant viewers in order for their business plan to succeed. Frankly, they can’t go on the air and tell viewers that there is nothing to worry about and that their time would be better spent outside on a bike or with friends and family. Instead, they must consistently remind viewers of all possible downsides to insert a fear that at any moment something could happen that would restrict our ability to meet our financial goals. This is an example of utilizing deceit to take attention away from the good news that is more reflective of our environment.

Another example of using excessive information to conceal good news is the emergence of ultra-responsive investment strategies. Study after study has concluded that the best way to make money investing in the market is to buy and hold long-term positions. That is great news because it is fairly simple and can potentially be accomplished by anyone (at least in principle). However, this great news is frequently concealed by investment institutions who offer a responsive solution to every possible market scenario. Even though research suggests that an investor is better off not reacting to variables impacting the daily market, some financial institutions still promote such a strategy so they can charge higher fees due to a more frequent level of involvement.

Hiding Bad News in Deceit

In some situations, some parties may hide the bad news within their agenda amongst an abundance of less relevant information. As you might have noticed, most annuities are overly complex and not easily understood. The contracts accompanying these products are commonly the size of a book and written in such a manner that even the most experienced financial planners have a hard time comprehending. Meanwhile, the excessive fees and outlandish surrender periods of these products are something that are frequently not discussed by the advisor promoting the product. This is an example of using BS to make something overly complicated to conceal their negative features.

A second example of burying bad news in deceit is the way non-publicly traded REITs (real estate investment trusts) are sold. As millions of investors have learned over the last 20 years, non-publicly traded REITs are not a liquid investment, and if an investor wants to quickly sell their holding they frequently need to do so at a steep discount (commonly less than 50% of the purchase price). Clearly, this is bad news. However, the financial salespeople offering these investments claim that not listing the product on a public exchange enables the product to endure less volatility because investors can never get online and see their investment’s value go down. Of course, just because investors can’t see the daily fluctuations in their investment’s value doesn’t mean that the price of the investment will be stable when the investor wants to sell, and most owners of non-publicly traded REITs ultimately eat their shirts.

The Best Solution Available

In all aspects of life, it is useful to question one’s agenda and examine the use of deception to achieve that agenda. This is as true in the financial service industry as it is anywhere else. Simply looking for scenarios where the use of excessive or non-relevant information might be used to conceal facts that are either good or bad for you is likely to sharpen your decision making skills.

Further, I’d suggest that working with a fee-only financial advisor is likely to minimize situations where someone else’s agenda might conflict with what is in your best interest. Fee-only financial planners are restricted from recommending financial products that reward them for doing so. Further, fee-only financial planners are held to a fiduciary standard, which means they are required by law to make recommendations that are in your best interest. These two factors are likely to limit the amount of deceit you’ll need to sort through.