Financial writer and friend Wendy Cook posted the following piece on her own blog recently, and granted us permission to share it here.

We like Wendy’s post and applaud the ideas of the late Hans Rosling because his work parallels our own emphasis on evidence-based investing. His bestselling book Factfulness points out that our instincts and biases often make it difficult to perceive the world factually. Just as we point out in our work with you, and as we’ve highlighted in past reviews of Michael Lewis’ book Moneyball, it’s tricky work to get out of our own heads and better understand the world through data and evidence minus emotion and instinct.

*Keep in mind Wendy writes for a special group of advisors.

Facts, Finance, and Feeling Good About Yourself

by Wendy J. Cook

Recently, I finished reading Factfulness by Hans Rosling. I discovered Rosling’s work nearly a decade ago when his YouTube video “200 Countries, 200 Years, 4 Minutes” went viral, at least among us data-dorks.

Finding Factfulness

Making the leap from Rosling’s four-minute video to his full-length book took some time. Unfortunately, it was time Rosling himself did not have, having passed away from pancreatic cancer in February 2017. Reminiscent of the late Gordon Murray’s inspiring collaboration with Dan Goldie on The Investment Answer, Rosling dedicated the last year of his life to completing Factfulness. He collaborated on it with his son and daughter-in-law, who published it in 2018.

Referring to “data as therapy” and “understanding as a source of mental peace,” Rosling urges us to employ “factfulness” to recognize that the world is usually better off than we think. With Bill Gates describing it as “one of the most educational books I’ve ever read,” I figured it was worth checking out.

Factfulness and Finance

How does factfulness work? Without it, we become overwhelmed by all the bad news going on around us. With it, the greater facts remind us that historical conditions have been even worse. In other words, we are making enormous progress, but close up, we can’t see it. Rosling explains:

“Journalists who reported flights that didn’t crash or crops that didn’t fail would quickly lose their jobs. Stories about gradual improvements rarely make the front page even when they occur on a dramatic scale and impact millions of people. … Safe flights are not newsworthy.”

It’s easy to connect these messages with the same ones you likely espouse for yourself and your clients as you help them embrace evidence-based investing.

A Higher Purpose

Beyond that, I took a greater message from the book. If your advice has been incorporating insights gained from behavioral psychology, it’s one you’re already familiar with, but it bears repeating: By losing sight of factfulness, it may often feel as if BIG acts, ENORMOUS effort and MAJOR improvements – the kinds we read about in the paper – are the only changes that matter.

All facts considered, this could not be further from the truth. Ordinary, everyday accomplishments are what Rosling describes as “the secret silent miracle of human progress.” Your and my small, unsung deeds are the streams that feed rivers that run to oceans of accomplishment.

So, whether it’s going that extra mile for your clients or dedicating some time to a community project, let’s each take on one or two good deeds – today, tomorrow, and the day after that. They don’t have to be huge; just make them a habit and, over time, that will do.

Give the Gift of an Amazon Review

Here’s one small possibility you may not have thought of: Give a good financial book a positive Amazon review.  

You see, some of my best friends are financial authors. So, I happen to know, one of the best ways you can help them increase their sales and readership is to review their books on Amazon. These days, a strong presence there is electronic gold, like being in the “featured books” section of a brick & mortar store.

Your review need not be novel-length itself. Two minutes, five stars, and a few sentences should do it. Go ahead. Pick some of your recent favorite financial reads, and go to it.

Whether the subject is sports, fashion or fiduciary investment advice, it’s always gratifying to be found in good company. We are honored our special friends Sid and Ann Mashburn recently added Odds On to their website, in Sid’s Home / Books collection. Better still, we’re right next to a favorite read of our own: Astroball, by Ben Reiter. And who doesn’t want to be seen hanging out with tennis legend and shoe icon Stan Smith (whose book I bought for myself at Christmas)?

If you’re from LA, Houston, Dallas, DC or Atlanta, you likely know what the Mashburns are all about, as these fine American cities are lucky enough to have physical Mashburn stores. For the rest of the U.S., with just a taste of their world through the web, know this: The Mashburn stores are as closely aligned with our evidence-based investment firm as any clothing retailer could be. It may sound weird, but it’s true. Their people, values, and vision all mirror our own. Sid said it best the first time we met him: “Either you stole my playbook or I stole yours.”

Bottom line, we’re honored to have made the list and hope Odds On will continue to inspire and welcome readers to seek fiduciary investment advice for their wealth management. And even if you don’t walk away with a copy of our book from Sid and Ann’s site, you’ll still know more about one of the great emerging retailers in our country.

Since our Take the Long View® strategy calls for a level-headed mindset and evidence-based rationale, I am disciplined about keeping emotions out of the mix. But sometimes, even I have to vent. For example, my outrage seems well-placed when it comes to exposing dark players who pose as financial “advisors” while they prey on those who can least afford it. When that happens, the real damage is done if we calmly ignore what’s going on.

We work in an industry with an insanely low bar to entry. As I covered in my book, Odds On, I’ve personally witnessed how many of the big-name brokerage firms prize their sales quotas over solid client care and education. In any industry, a convergence of greed and incompetence is ugly. In wealth management, it can be life-shattering.

That makes me mad. Through our own experiences and in speaking with investors, we see the damage done far more often than you’ll read about in the papers. Yes, regulators have been known to levy millions, if not billions of dollars in fines against the worst offenders, but is it working?

Consider this recent article from personal finance columnist Tara Siegel Bernard. It makes me sick to my stomach to read that a “sandwich generation” daughter had to discover her ailing mother’s broker was quietly extracting roughly 10% in annual commissions from Mom’s account (compared to an industry norm of closer to 1%). In financial speak, that’s known as “churning,” or buying and selling just to turn a profit at the investor’s expense.

Worse, at least when Bernard published her piece, the offending broker was still employed at the same firm. The firm’s response? Bernard reports: “In a statement, [it] said, ‘The client agreed to an appropriate resolution of this matter in June.’ The firm said it was committed to doing the right thing for its clients, and was ‘disappointed when any feel their expectations haven’t been met.’”

What a ridiculous response!

Through the years, I’ve heard from many in our industry with their own tales, which sync with my experiences. The common thread is selfish salesmanship. Today there are thousands of independent investment advisory firms, all of whom are held to a fiduciary standard. While even that can’t prevent a criminal bent on malfeasance, it’s a step in the right direction.

Things are getting better, but it’s time more investors start choosing true financial advocates, not just the family relation, nice neighbor or daughter’s affable softball coach. It’s time to fire the entrenched, big-name brokers who don’t have to (and often don’t) represent your highest financial interests. It’s time to lead with questions such as: Is our relationship always fiduciary?

If the answer is anything besides, “Yes, always,” or if the written version is accompanied by an asterisk and a bunch of fancy legal footwork, it’s time for you to say no. You deserve better.

PS: Check out our related press release about Hillfolio, and how we’re working hard to bring “better” to an even wider range of investors.