The Wizardry of Dr. Oz – the Problem with Mixing Advice and Entertainment

Sam Swift, CFA, CFP®, AIF®

Apr 30, 2015

By: Sam Swift, CFA, CFP®

You may have seen that Dr. Oz has been in the news recently, and not in a positive way. For those that may not know, Dr. Oz came to fame after appearing as a health expert on Oprah’s show for many years and has been hosting his own show for the past five years. The recent controversy began when ten doctors issued a public letter demanding that Dr. Oz be removed from the board at Columbia University because he frequently pushes “quack treatments….for personal financial gain”. It turns out that some of the doctors who published the letter may have some conflicts of interest of their own, by the way, but that doesn’t take away from the fact that Dr. Oz was called to testify in front of a Senate subcommittee last year and didn’t exactly come away looking great. As one senator put it during the hearing, “I’m concerned that you are melding medical advice, news, and entertainment in a way that harms consumers.” Substitute “financial” for “medical” in that quote and the senator could have been speaking to any number of CNBC talking heads.

The problem, of course, comes from the mix of all three—advice, news, and entertainment. The only real value from CNBC is entertainment with a bit of news thrown in, but the fact that they give advice from time to time muddies the waters. In Dr. Oz’s case, he was a well-respected cardiothoracic surgeon well before he came to prominence on the television, but that only makes it worse. This parallels the financial channels in that I can find Warren Buffett occasionally getting time to give good advice (buy low-cost index funds and hold for a long time) immediately followed by Jim Cramer’s daily “Mad Money” show. It’s not that Dr. Oz or CNBC don’t have valuable advice to be found, but that it becomes very difficult to figure out whether what I’m hearing is good advice, news, or entertainment at any given point.

Of course, Dr. Oz has been accused of taking it a step further and actually shilling for products that have no scientific backing (and that’s in the medical field which was founded on science and evidence—imagine what can happen in the financial field which was founded on sales and largely ignored evidence for most of its history!) Well, this phenomenon was most prominent during the gold boom when certain “business news” commentators were getting paid by gold companies to shill for their product without clear disclosure. Of course, it still happens every day as commentator “advice” frequently aligns with their interests in their day job (mutual fund manager, hedge fund trader, etc.). Shocking, I know.

There’s a legitimate reason this happens, by the way. Good advice tends to be directly at odds with entertainment value. It’s unlikely that Dr. Oz even has a show if every episode was five minutes: intro graphics…segment telling you to eat in moderation and exercise consistently…credits. Unfortunately, this applies to finance as well. Here’s my dream show: intro graphics…segment telling you to spend less than you make and invest the difference in a low-cost, globally diversified portfolio of index funds…credits. Unfortunately, I have yet to get a call back from any network. Maybe if I add another segment that’s just YouTube clips of puppies playing with babies….

Alas, like many of the financial talking heads who have been called out for their malpractice, Dr. Oz still has his show and his followers. I suggest you rely on actual, conflict-free professionals (doctors, fiduciaries) for your actionable information and recognize entertainment for what it is.

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