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The Financial Circus: How Mobile Apps and Greed Are Misleading a Generation

Writer's picture: Steve ConleySteve Conley


In an industry obsessed with "funds under management," the financial services sector has lost its way. The difference between genuine, holistic financial planning and simple asset selling has become so blurred that it's almost laughable. These days, the bigwigs in finance are salivating at the thought of putting mobile apps in the hands of the younger, underserved masses. But here's where it all goes wrong.


Everyone in the financial services industry, from the distributors to the government regulators, exists to tap into client assets for their fees. It's a simple equation: the more funds they manage, the bigger their cut. Charlie Munger famously said,


"Show me the incentives, and I'll show you the outcomes."


And boy, do the outcomes show. The entire system is so warped by its own incentives that its players are blind to the truth, like addicts in desperate need of rehab. It would take years to clean up this mess, just like getting off a hard drug.


Their language gives them away. Selling investments is called "service," as if they’re doing us a favour. High-ranking executives proudly brandish titles like "Chief Revenue Officer," making it clear that their revenue is all that matters. Customers who don’t have piles of cash to hand over are deemed "low value"—a term that's as offensive as it is telling. What they really mean is that these customers haven't saved enough to make them worthwhile.


Financial advice is dressed up in misleading terminology too. Recommending which asset to buy is called "advice," while giving people a range of assets to choose from is "guidance." But let's be real: it's all just sales. The industry claims to be heavily regulated, but those regulations are aimed at sales, not true financial planning. Unless, of course, financial planning is just another tactic to sell investments.


The industry’s latest bright idea? Get these sales tactics onto every mobile phone in the country. They want to ensnare customers from a young age and keep them hooked for life, turning every stage of the investment product lifecycle into an opportunity for profit. And when the public doesn't buy into their schemes, they blame the victims. "They don't have the right skills," they say, or "They make ill-informed decisions." It's a convenient excuse for an industry that has failed to offer real, holistic financial planning.


Take this Chief Revenue Officer, who gushes about how apps can revolutionise financial planning for "low value" clients. She talks about digitising financial advice and leveraging technology to "serve" millions. But what she's really saying is that the industry needs to find new ways to sell to the masses.


Her vision involves hyper-personalised content delivered via apps, lowering the cost to serve and scaling up the sales pitch. She touts the potential for technology to fill the so-called "advice gap," but it's clear that the focus is on moving product, not on meaningful financial planning. And let’s not forget the industry's perennial scapegoat: regulation. Startups with innovative ideas come and go, stifled by regulatory requirements that supposedly hold back progress.


In reality, the financial services industry is less innovative because it doesn't have to be. It’s too busy raking in profits from its tried-and-true methods of asset management. The industry's true innovation lies in finding ever more cunning ways to extract fees from client assets.


The Chief Revenue Officer suggests that regulators need to incentivise a focus on the entire customer journey, from the early stages of saving to retirement. But without substantial change, any shift will merely direct the industry's predatory gaze towards a new tranche of wealthy individuals. The mass market will continue to distrust and avoid these financial predators.



So, while the industry may dream of a future where every mobile app is a gateway to financial planning, the reality is much darker. Until the financial services sector stops treating clients as mere sources of revenue, it will never gain the trust or respect of the public.


And there you have it: a look at an industry that has lost its way, blinded by its own greed and driven by perverse incentives.

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