In case you missed it, there’s an article in the Washington Post by George Mason University Law Professor Ilya Somin that is making the rounds on the Internet about an online poll of a representative sample of the U.S. population conducted by the Oklahoma State University Department of Agricultural Economics. The poll asked how people felt about various food-related government policies, such as a tax on sugared soda (60.91% oppose), or country of origin labels on meat (86.1% support). It’s an interesting survey, at least to nerdy types like me.
Yet the inquiring minds at OSU did something else in their survey that’s even more interesting. To gauge how informed consumers are on these issues that they seem to have strong feelings about, they asked a trick question: “How do you feel about mandatory labels on foods containing DNA?”
Now, for those of you still thinking about the portfolio that you just finished reallocating, let me remind you that DNA is that pretty double helix that contains the genetic code of all living things. Consequently, DNA is found in every living cell on the planet, including all of our own cells, and virtually all the food we eat: meat, fish, vegetables, fruits, grains, legumes, nuts, you name it. Still, a good 80.44% of those surveyed (that 4 out of 5, right?) felt that we need to have labels on food warning us of the DNA lurking inside.
Professor Somin’s article also included Oklahoma State economist Jayson Lusk’s suggestion as to what a DNA food label might look like: “WARNING: This product contains deoxyribonucleic acid (DNA). The Surgeon General has determined that DNA is linked to a variety of diseases in both animals and humans. In some configurations, it is a risk factor for cancer and heart disease. Pregnant women are at very high risk of passing on DNA to their children.”
This may not seem very relevant to the financial services industry, other than the observation that brokers and independent advisors seem to have very different DNA. But it seems to me that some of Professor Somin’s conclusions are as a fitting to financial consumer protections as they are to dietary policy. “Polls repeatedly show that much of the public is often ignorant of both basic scientific facts, and basic facts about government and public policy,” he wrote. “A 2012 National Science Foundation survey even found that about 25% of Americans don’t know that the Earth revolves around the sun rather than vice versa. For many people, there is little benefit to understanding much about genetics or DNA. Most Americans can even go about their daily business perfectly well without knowing that the Earth revolves around the sun.”
It’s no secret that for most Americans, facts about the workings and legalities of the financial services industry clearly fall into this category of willful ignorance. That’s why many people hire financial advisors: they don’t really want to know. That’s also why the SEC’s initiatives to “better educate” the public on matters financial have been dismal failures, and are doomed to continue to be failures. So are disclosures: most “investors” don’t know a fiduciary from a Form ADV. And they don’t want to.
Who can blame them? What they do want is sound financial advice that they can rely on without thinking about it too much. And it’s incumbent on the independent advisory profession to provide it. Just don’t ask consumers to tell you how do it: If history tells us anything, it’s that people often have strong feelings about things we don’t know anything about.
It seems to be in our DNA.