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The Scam is Everything (Part 1)

One thesis I explore in this blog continues to be supported with few exceptions:  the financial industry is a scam.

I cannot prove this.

I sometimes have trouble explaining exactly what this means.

But the more you read my posts and think about how the general themes fit together, the more you will see me chipping away at a foundation assumed by many to be, at some level, sacrosanct.

Make no mistake:  respect for the financial industry is hardly held up on a pedestal or even, in general terms, spoken about with healthy respect.  The Occupy Movement (“we are the 99%”) drew a line separating “Wall Street”–the few people with great wealth–from “Main Street”–the vast majority of the population comprising a small percentage of total wealth.  Banks and investment advisory services are often spoken about with disdain.  The stock market is often said to be manipulated.

People do seem to have an easier time hating the financial industry in general than the specific people or entities with whom they interact.  As an example, you may have a good relationship with a banker or manager at your local branch.  You may have a financial advisor who you trust.  Cognitive dissonance theory helps to explain this (http://en.wikipedia.org/wiki/Cognitive_dissonance).  Most people need to have a local bank and most people with money believe they need a financial advisor.  If you truly dislike your banker and your financial advisor then why are you sticking with them?  If I am with a bank I hate and a financial advisor I don’t trust then maybe I am the dummy for not getting off my couch and exploring to find new ones.  People don’t want to admit this so they [unconsciously] form a more favorable opinion of their bank and their financial advisor, instead.  Your own mind may contribute to your being sold.

And while people hate the industry as a whole, they’re less likely to suspect or realize the ones they have direct interactions with are also cut from the same, untrustworthy cloth.

I will continue this discussion with my next post.

Comments (5)

[…] my last post I began a slow ramble about how the financial industry strikes me as a […]

[…] last couple of posts elucidated my general belief that the financial industry is a comprehensive scam.  I mentioned […]

[…] SEC finding reverberates with suspicion I have shared in previous posts regarding statements of success by financial advisors, investment newsletters, trader’s […]

[…] newsletter, advisory service, or trader’s education program. I have waxed eloquent about the shadiness in the industry, which as a whole deals with some of the dirtiest stuff we touch on a day-to-day basis. MacDuff […]

[…] toward the asset management industry. Examples of posts where I have expressed a negative bias are here, here, and […]

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