If you’re like me, you use the SEC’s website quite often. It’s always been a good site and, although for my purposes it could easily have been more streamlined, I never found anything to complain about.
That being said, I like the look and feel to the new and improved site. It’s really modernized what had become, I now see in retrospect, a fairly stultifying site.
I was even more excited to see the SEC created a companion investor education site called investor.gov. I took a look at it, expecting to see the government’s interpretation of what every investor ought to know. Here’s the quick 4-1-1 on it: Don’t bother going there. In fact, if you know or work with retail investors, discourage them from going there.
It’s a testament to the importance of quality content (in the old days, we would have called it “GIGO” – “Garbage In Garbage Out”). For the full review of the site as it pertains specifically to retirement investors, see “Revamped SEC Website Offers Goodies to Investors,” FiduciaryNews.com, January 23, 2013).
Oddly (for someone not inclined to put too much stock in anything the government does), I was hoping for so much more. The problem I have with most investor education sites is the subtle and not-so-subtle biases that tend to creep in over time. In some cases, they stick to old ideas that have since been disproven.
In other cases, they emphasize the extreme as if it were the norm. The bottom-line is this: Investing isn’t rocket science and savings is as easy as 1-2-3. Both require only one thing for success: discipline.
Now, honestly, (and again ironically for other reasons we need not get into here), I didn’t expect the SEC to be so patronizing as to be this blunt. But I did hope it would have at least summarized some of the more salient points of the last decade or so of research in behavioral finance.
With its undo (and overdone) emphasis on fraud, you’d think a quick review of behavioral tendencies would have been instructive. After all, the government probably paid for most of that research. You’d think it would have wanted to get its money’s worth out of it.
No. Unfortunately, this site that purports to educate the investor merely throws out a few tired bromides and then directs you to the never-never land of links. I suppose it could have been worse. It could have been a restatement of Modern Portfolio Theory.
Oh, it did get in the usual misleading statement about the importance of low fees (ignoring the greater importance of returns), but at least it didn’t go back to the bad-old days when we thought MPT would solve the world’s problems.
In the end, is it really the job of the SEC to educate the investor? Heck, for that matter is investing even something one can become educated in? (Experience in? Yes. Educated in? I doubt it.) Besides, at what point does education cross the line and become advocacy?
And if the SEC becomes an investment advocate, then doesn’t that make it a competitor of the very firms it’s been charged to regulate?
And if that isn’t one big honking fiduciary conflict of interest, then I don’t know what is.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
