Confession: I say ‘Do your own research’ a lot. I say it on this website, I say it in my social media posts, I even say it in person, after someone asks me for financial advice.
I repeat it often because it is considered good practice among personal finance content creators. It is even used to sign off, in a ‘I’m done now, ok bye’ way: Bla bla bla. Remember, not financial advice, do your own research. NFA, DYOR.
However, an exchange during a webinar with the good folks at Institute of Capital Research Malaysia got me thinking. They asked, ‘but even if you don’t mean to, people who look up to you will still take what you say as financial advice. So what do you do?’
I have to admit, that hit me hard. I didn’t know what to say, and mumbled something along the lines of ‘but by saying it my responsibility is done’. Which isn’t a very good answer.
So that brings us to,
When is it financial advice, and when is it sharing personal experience/sentiment?
I always maintain that personal finance as a topic is NOT the sole domain of financial experts. EVERYONE should talk about personal finance. Normalising money conversations is one of the most important, if not the most important thing in producing a financially literate and responsible society.
Another reason to talk about money – if you don’t, then the financial content available will only come out from financial organisations and service providers, who don’t necessarily act in your best interest because their business interests come first (nothing wrong with that).
So now that we have established that, the question is: where is the line between financial advice and sharing personal opinion? And is saying ‘Do your own research’ after sharing said opinion enough, when there are harmful – even though unintended! – consequences?
The (Unintended) Harmful Consequences of Saying ‘Do Your Own Research’
I listed them out. Here are 8 unintended yet harmful consequences of saying DYOR that I can think of:
1. It’s an easy way to avoid responsibility and consequences.
Aka ‘I already told you to DYOR, so why didn’t you?’
2. It is usually silent on where to do said further research.
Thanks for the reminder to learn more, but where are good places to start?
3. And even if further materials are provided..
Do they only serve to prove one’s ‘advice’, or do they give alternative viewpoints as well?
4. It leaves people at the mercy of marketing strategies.
Do you think the financial advice you googled for is on the first page of Google by chance? No, they search engine-optimised the heck out of it, with the hope that you’ll buy their products eventually.
In the same vein, financial companies also implement various referral and affiliate programs to encourage people to promote them. The incentives are so attractive that I share my own referral links all the time. #meta
5. It neglects the human tendency to mistake confidence for competence.
Yes ‘DYOR’ is essentially good practice but not when you get info from incompetent people who happen to be confident. (This is also why mediocre but confident men get promoted or viewed as leaders more)
6. It scares people and delays them from taking action
As they have to do this massive task of doing the research first.
How are you supposed to ‘invest as early as possible’ if you are told to ‘know EVERYTHING you’re investing into’? Heck I still don’t know what EPF invests in exactly but most of us have our retirement money there, don’t we?
7. Good intentions =/= good outcome.
I could share something which I thought is wonderful, and it could be the worst possible option for someone out there.
8. It shifts the blame
When people make mistakes, they are just dismissed and told off for not doing enough research. Isn’t it is far better for companies to design good products in the first place?
Those are the ones I can think of right now; there may be more.
But most importantly, I found out that saying NFA and DYOR is basically… useless.
What constitutes financial advice, according to the SC
Sections 2.2 of the Securities Commission’s Guidance Note on Provision of Financial Advice document is clear in saying that NFA DYOR disclaimers do NOT void someone from responsibility. If someone takes your recommendation, it is, for all intent and purposes, considered as advice.
What I am doing to be a more responsible personal finance content creator
(Important: I’m aware many people aside from myself say Do Your Own Research. I’m not calling anyone out, only myself.)
Throughout all my years being a personal finance blogger, I’ve probably contributed to ALL of the harmful consequences, even though, again, I didn’t mean to. And even though I said I blog about personal finance for my own sake more than for your education, I can’t stop the negative consequences, only reduce them.
I believe that anyone can contribute to personal finance chatter regardless of financial background (or lack thereof), but the guilt weighed on me so much, it factored into my decision to finally taking the Certified Financial Planning (CFP) course. What started as a hobby may now end up as a career in financial planning advisory. (Maybe. I don’t know yet).
Anyway, what I’m trying to say is (1) I’ll be more mindful with what I say, and (2) I’ll maintain my style of writing and continue sharing my notes and experience with various financial tools and opportunities. If it sounds ‘advice-y’, it’s only because I can back it up with experience and/or research.
But! Do Your Own Research is still better than It Depends
This is my opinion, but no matter what, Do Your Own Research disclaimers is still better – WAY BETTER – than ‘it depends’.
‘It depends’ dulls the conversation, even though it is technically the right answer. And I argue that bringing excitement to personal finance is what is needed, more than technical accuracy. Don’t underestimate fun – it leads to consistency.
So that’s my stance with NFA, DYOR. What do you personally think of the phrase, when you hear people saying it?