Why Do People Still Trust Investment “Gurus” With Their Monies In Current Age Of ETFs And Robo-Advisors?

Just for heads up, I think this post may ruffle some feathers, but I want to say that I am not targeting any specific person.  I am just sharing my thoughts through a general post.  Most of the following points are my personal opinions while some are thoughts share by my friends during casual discussions.  I am not against any individuals following the recommendations by gurus and performing the investment transactions on their own.  Instead, what is baffling me is why individuals pass their monies to gurus who will "invest" on their behalf.

In today’s financial world, it has never been easier for individuals to start investing.  With low-cost Exchange Traded Funds (ETFs), robo-advisors, and a mountain of free educational resources from books, YouTube videos and blogs, anyone with a smartphone and internet connection can begin building their own portfolio in just minutes.  Yet, despite this transformation in the investing world towards simplification, many people still choose to entrust their money to “gurus”, who are individuals who promise outsized returns, offer premium stock tips, or manage portfolios for a fee.  This phenomenon raises a compelling question in my head: "Why do people still hand over their hard-earned money to investment gurus when modern tools have made Do-It-Yourself investing simpler and safer than ever?

The Appeal of Investment Gurus

There are a few possible reasons why people continue to seek out financial gurus, despite the rise of automated and passive investing options:

1)     Desire for Outsized Returns

Many individuals are enticed by the idea of beating the market.  ETFs and robo-advisors typically focus on long-term, average market returns.  That is not sexy returns.  Some gurus, on the other hand, often showcase impressive (and sometimes cherry-picked) results, turning small sums into large fortunes. This appeals to those who want to shortcut the slow and steady path.

2)     Delegation and Convenience

Not everyone wants to research markets, rebalance portfolios, or track financial news.  Some people prefer to offload the responsibility to someone they believe knows more or can do better.  A guru often appears to provide a human touch, a “trustworthy” figure instead of a faceless algorithm.

3)     Community and FOMO (Fear of Missing Out)

Many gurus build strong online communities, offering exclusive groups, Telegram chats, or courses.  These spaces can be energizing and full of optimism, which can give investors the emotional boost they might not get managing their own portfolio.  Unfortunately, this emotional appeal can sometimes override rational analysis.

4)     Lack of Financial Education

Despite the availability of information, many still find investing overwhelming.  Gurus simplify the narrative - buy this, avoid that - and provide a sense of clarity (whether justified or not is up to individual's interpretation).

The Risky Reality: Not All Gurus Are Equal

There are legitimate financial educators and professionals who genuinely want to help people grow their wealth.  However, the guru space is also rife with risks:

1)     Scams and Misrepresentation

One major danger is fraud.  Some individuals pretending to be investment experts run Ponzi schemes, offer fake returns, or disappear with investor funds.  Worse still, even reputable gurus can have their identities hijacked by scammers who create fake profiles to con unsuspecting followers.  There are many news articles and reports recently on such matters.

2)     Overpromising Returns

Many gurus showcase historical wins but conveniently omit the losses.  Others claim market-beating returns without showing transparent, audited track records.  This can create unrealistic expectations and drive poor decision-making.

3)     Lack of Accountability

Unlike licensed financial advisors, many online gurus are not bound by fiduciary duty.  If things go south, followers are often left with no recourse.

As a summary and overview, the pros and cons of letting gurus managing one's investments are:

Pros:

• Can save time and effort if the guru is genuinely competent.

• May offer educational insights or a structured approach.

• Emotional support through a community of like-minded followers.

Cons:

• High risk of fraud or misinformation.

• Lack of regulation or consumer protection.

• Potential over-reliance on someone else's strategy or opinion.

• You may learn less and stay financially dependent.

My Personal Take: Why I Do Not Hand My Money To A Guru

Personally, I choose not to outsource my investing to any guru, no matter how convincing they may seem.  When it comes to my money, I believe in full accountability.  If I make gains, they are mine to enjoy.  If I suffer losses, they are lessons I own.  Win or lose, I want to be responsible for my financial journey.

I may not grow my wealth at lightning speed, but that is okay.  I find peace of mind in managing my own portfolio - primarily through slow and steady dividend investing.  It is not flashy, but it is transparent, consistent, and aligns with my long-term goals.  Nothing beats having full control over all my finances in my own hands.

In a world filled with hype, shortcuts, and overnight riches, I choose the quiet path of discipline and self-reliance, even if it means crawling at snail speed towards financial independence.  At least I know I am learning along the way, and growing together with my portfolio.  When returns does not come easy, it makes me cherish every dollars and cents more.  Barista FIRE, here I come...!