Although financial experts offer valuable advice to consumers, most of them have hidden conflicts of interest. A university professor who is urging the end of capitalism might have a financial incentive to promote his book. A high-profile economist might not be able to give a truly objective assessment of the current financial climate, or of a certain stock in the banking industry. Similarly, a stock expert who happens to own a company may be biased and not even know it.
However, many of us tend to place trust in these experts based on a glossy brochure, a personal recommendation, or a standardized computer printout. It is common for us to believe that an expert knows better than we do, and we want to trust them because they have the experience and connections to back their advice. In reality, there’s no real basis for this blind trust. If you’re considering hiring an expert, consider this: Are they demonstrating great skill and dexterity? Most importantly, do they have better results than you?