When I decided to start this blog, I made a series of commitments to myself and to any readers I may have: no affiliate links, no advertisements, full disclosure, and honest opinions. I did this both because it felt like the only way that I could blog with integrity and also because I am concerned about the effects that affiliate links and advertising have on any source of information (blogs, newspapers, magazines, etc.).
Affiliate-Link Bloggers are like Commission-Based Advisors
So we all know that if you hire a financial advisor, you should avoid one paid on commission and instead hire a fee-only advisor, right? I mean, you wouldn’t want to get financial advice from someone who was only getting paid based on the products that she or he sold to you, would you? A commission-based advisor is going to be incentivized to sell you whatever pays the highest commission, not what is best for you.
Well, it too often seems like financial blogging faces a similar problem, as most bloggers are making money on a commission structure based on the financial products and services that they blog about. After all, that’s what an affiliate link is – it’s a commission payment. If they can sell a blog reader on buying that product, they get paid. The more a blogger sells you on products with high commission payments (affiliate links) the more money the blogger makes. Sounds a lot like a commission-based financial advisor, doesn’t it?
Advertising Affects Writers’ Views
Ok, so affiliates are definitely out. What about advertising?
When I was in college, I spent a chunk of time studying media and journalism. One of the things that really stuck with me from all those classes, books, and research projects was that advertising changes the content of even the most reputable news outlets. In some cases research revealed that advertisers put direct pressures on editors, managers, and writers to change news content and in other cases research showed that reporters and editors were more subtly and maybe even unconsciously biased to favor their advertisers.
The result of all this research is a pretty clear causal relationship between advertising and bias. Even when reporters and editors try to operate with the highest integrity, the advertising revenue may still cause them to favor the advertiser in their writing.
I think this last point is what really drove it home for me. Even though I try to write with integrity and I believe that most financial bloggers also try to operate with integrity, once someone’s financial interests align with a sponsor (be they an affiliate or an advertiser), the bottom line is that bias will find its way into the writing. Subtle forms of justification and rationalization produce less than ideal decisions about products or services.
What Else Could Justify Recommending PersonalCapital?
You may have read many financial bloggers recommending PersonalCapital.com. This absolutely boggles my mind. Not only does PersonalCapital have absolutely outrageous management fees, but the primary value offered by their robo-advisor isn’t anything you can’t do yourself. And if you don’t want to do it yourself, you can find other robo-advisors who offer similar services at far lower fees. Given how much the financial independence and FIRE communities tout the importance of low-fee index investing, it seems downright impossible to imagine a sound argument for being a PersonalCapital customer.
On top of that, when I did sign up for a free PersonalCapital account just to track my investments (which is, admittedly a neat service), my experience was that they hounded me by telephone to no end trying to sign me up for their services. They are one of the most persistent, annoying, and aggressive financial services marketers I have ever encountered. Worse, the “advisor” they assigned me knew far less about the market and about how returns work than your average FI blogger. In fact, he seemed to be just a sales rep who had maybe a week of training and some scripts. It was a painful experience talking to him.
Yet, I see dozens of financial bloggers telling people to go check out PersonalCapital and sign up for a free account to track investments. Why would bloggers do this? Well, I bet they have lots of reasons that they might even have used to convince themselves that it’s good for their readers. BUT, those bloggers are also using affiliate links to feed their customers to PersonalCapital and they only get paid from those links if the reader gives PersonalCapital money to manage. And, we should note, financial bloggers consider PersonalCapital’s affiliate payouts to be some of the most lucrative available.
I Don’t Want to be That Guy
Other bloggers are, of course, free to do as they see best. I know many bloggers (in the FI world or elsewhere) are doing it as a side-hustle to make money and those affiliate and advertising payouts are the top priority. Fair enough, we all like to make a buck (especially me). I just never want to be that kind of blogger. I never want to be the blogger who is prioritizing revenue over an honest assessment of a service, product, stock or anything else. And knowing what I know about advertising, journalism, and psychology, I know the only real insurance against such bias is to refuse to place any affiliate links or advertising on this blog.
Oh, and, of course, to always provide full disclosure of my investment holdings.
I don’t have any intentions to “monetize” this blog, but if I ever did, I would sell readers something of value that I make – not by advertising or promoting others’ financial products and services.
And if I do write about a product or service, even if I strongly recommend it and provide a direct link to buy it, I will not use affiliate links. Ever. That ensures I’m never tempted to skew my opinion to justify placing that link or promoting that product.
That’s my promise to you – and to myself.