In the world of financial advice, it seems like everyone is trying to sell you something.
Financial advisors like Ameriprise are really interested in selling you into their mutual funds. Most financial media doesn’t care how you really do, they just want your eyeballs.
But then there’s some outlets that really have your best interests in mind. Fee-based financial planners charge you for time and advice — not for a product.
Some personal finance blogs, like The Simple Dollar, really care about your financial well being. Trent, the site’s author, recently had a long discussion with his readers about the advertising on his site.
In December, he removed nearly all the ads because he thought many were unethical. He’s recently decided to bring them back at the behest of his readers, but encourages them to report unethical ads for removal.
I recently had a job interview with a major financial Web site, where they admitted that they tie in most of their stock advice to ads for their paid newsletters. (Full disclosure: I didn’t get the job. They said they are “going to give priority to candidates with more experience in investing.”)
When I explained my investing philosophy — low-cost, diversified index funds (not individual stocks) — they agreed that it was the way to go for most investors. But even though they say they target the vast majority of investors, they write about stock picking to promote their paid newsletters.
The next time you get financial advice from someone, ask yourself: how does that person benefit?
Are you buying into something they own? Are you getting biased advice?
How do I benefit from this blog? I make a bit of money from running Google Adsense ads and the featured sponsors you see on the right, but nothing close to livable earnings. I also benefit by developing my skills dispensing financial advice.