On Fitbits & Fees


If you are like me and frequently trying to battle the temptation to eat delicious fattening foods in large quantities, you may have ended up purchasing some of the latest wearable tech designed to “nudge” you into better behavior. Such fitness trackers, like the fitbit Charge or Jawbone UP, have become extremely common place. Thousands and thousands of Canadians are currently tracking their steps, exercise and caloric intake through their phones and wristbands.

There’s only one little problem. Many people don’t ultimately stick with their new healthy lifestyle.

The age of the internet has brought with it the age of big numbers, and the belief that human activity can be simply discerned with the right amount of information. Figure out the correct code and human behavior can be reduced to a matter of basic inputs. Such ideas have appealed in particular to economists, who for a long time have argued that humans are rational machines that pursue self interest. Despite overwhelming evidence that humans do lots of stupid and irrational things, much of it leaving them miserable, economists have argued that it really just means we don’t adequately understand the real motivating self interest at play. Big data promises to change all that.

Wearable technology, particularly around fitness, has aimed to make managing your health easy, and frequently fun. But most people abandon their trackers once the novelty has worn off. The people who continue to use them were the ones already inclined towards regular fitness and managing their health. In other words changing behaviour is considerably harder than just giving people a nudge.

If this is your idea of fun, you probably don’t need, but will regularly use a fitness tracker.


The same is true for investing. The current focus in the investing world is on fees. Fees, it is argued, should always be lower and the primary concern of investors should be around those same fees. But focusing on fees as a solution to investing woes is like a fitness tracker managing your diet, it’s most useful when you already look after all the other aspects of your life. It’s not that fees aren’t important, but as a measure of your financial health it is really last on the list.

An anecdotal example of how little fees matter comes when I meet people who frequently have TFSAs at a bank. How did they get their TFSAs? One day a teller recommended they open one, and having heard that a TFSA was some kind of good idea they did it. What do they hold in that TFSA? When was the last time it was topped up? When did the person last hear about it’s performance? Who is encouraging them to continue saving? Has anyone reached out to discuss rebalancing or other investment strategies?


The answer to these questions frequently is a shoulder shrug. Yes, fees are important but they can’t make sensible planning happen, nor can cheap financial management encourage people to take a more active interest in investing. Worrying about fees in a world where many people either aren’t saving, aren’t saving enough, don’t know what they are saving in, and are unsure what their savings options are seems to be putting the cart before the horse, assuming incorrectly that one leads naturally to the other. In truth you can only be mindful of fees once all the other investing options have been taken care of.

In many respects the internet is increasingly giving us the impression of knowledge and control, but often times that only seems to be an illusion. As we increasingly migrate to low cost solutions provided through our phones and tablets we may not always realize that our best solutions are not always the lowest cost ones, but the ones that best suit our needs.

Within my business we have always strived to keep our costs down, and I have the comfort of knowing that our costs are competitive. But the reason that investors have chosen to work with us has little to do with cost. For my clients that we have helped steward into retirement, the young and new investors who have a chance to sit down and discuss their investment needs and learn about all their investing options our real value is not in cost, but in being accessible, providing clear advice and peace of mind. There is no fitbit for that.


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