By: MyPerfectFinancialAdvisor
Most people brush their teeth twice a day, every day. It is essential for the health of your teeth and gums, and in fact many studies show that tooth and gum health effects whole body health as well. In addition to daily oral care, most people used to see a dentist once per year or whenever there is a problem like pain or teeth straightening. However, there is a growing issue of do-it-yourself dental care that is creating issues, so much so that the American Dental Association has made efforts to educate the public on DIY oral care. There are important parallels between tooth care and investing to explore.
Relating to the ADA effort, there was a full-page ad in The Wall Street Journal encouraging people to use a dentist and discouraging people from performing do-it-yourself dentistry. When one considers dentistry, many would agree that it not smart to perform their own dental work, and perhaps be so arrogant that they could do what a dentist does. However, the trend is real, necessitating the ADA to take action. The combination of Youtube videos on straightening one’s own teeth, to home-use veneers, to teeth whitening products have created great problems because either the online advice is bad, or the person over-uses or misuses the product. Dentists, orthodontists and periodontists have reported large numbers of patients who have harmed themselves, hence the ad campaign.
The first lesson from the ad and the ADA comments is the message “don’t be 100% DIY”. The ADA website states clearly that if you are going to use a product like a whitener, or tooth aligner, please have your dentist opine on the proper use. Investing has the same reality and there are a multitude of studies that make this point. From the government backed Rand report to white papers from firms like Morningstar and Vanguard, have all pointed out that investors are not educated to the level necessary and greatly benefit from not being 100% DIY. In our world of Bitcoin, raging markets, trading costs at zero there are many opportunities for an investor with no guidance to hurt themselves financially.
The second lesson, and this is more for the financial advice industry itself, but it is helpful for investors to be aware of, is that the ADA is the primary dental association for all those in the dental industry. But in the wealth management, advice and investing industry there over 30 or so associations that exist, with no unifying message to investors, making it hard to combat a self-destructive DIY investor. Ideally, there should be one association that all persons in the investing industry belong to and the mantra “Advice”, or some other unifying moniker should be employed to impress upon investors and consumers that getting financial help is a good idea.
The final lesson is the ADA did not bash the products that were being misused, rather stated if you are considering using these products, have a professional give an opinion. We still hear and read to this day a fair amount of outright or subliminal bashing between financial competitors going on. There will always be accurate criticism of one’s competitor to be made, however, investors generally do not want to hear it, and it is not educational. Negative selling does not work, and never has and is perceived as unprofessional. The better path is to educate the client on why a course of action or product is not ideal for them, and refrain from criticizing the competition.
Do-it-yourself projects like woodworking, knitting and cooking are wonderful, fun and fulfilling. Being a complete do-it-yourselfer for your teeth or your money is fraught with potential ill-effects. Investors and the financial advice industry at large would be well served if they both take a page from the ADA’s effort.
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