I rather enjoyed Latin in high school.

Honestly.

Learning what those two amicii, Caecilius and Gaius, were doing in horto proved unexpectedly useful in the real world. It’s helped me expand my vocabulary, understand English better and, eventually, curse the geniuses who thought basing so much of our language upon a long-dead tongue of an ancient empire.

But I had to wait years after classes in that warm, chalk-dusty room to learn a phrase that has shaped my views on just about any event:

“Cui bono”.

“To whose benefit?”

It’s a useful piece of flotsam we can cling to while we drift in this ocean of marketing noise and self-interest. You can use it as part of your filtering process when it comes to choosing who to listen to.

It could be a key component of your BS detector.

How Full is Full?

But what’s it mean?

Well, take the cap on the bottle of detergent atop your washing machine.

That cap is far bigger than it needs to be. Twice the size, probably. Because you don’t need ever really need to use a full cap. A half cap, at most, will leave your clothes fresh and clean.

But there we all are, sloshing in enough detergent to reach the brim of this too-big ‘measuring’ device for every load of misbegotten washing (if it seems like I spend a lot of time doing the washing…correct!).

So why do we all use this incorrect measure for our washing?

Well – cui bono?

Who benefits from us using twice as much detergent with every wash?

Why, the detergent maker, of course!

Halve the loads in a bottle, double your sales. It’s genius, really. ‘Encourage’, persuade, nudge people into using more detergent than needed and that’s just good old business sense.

Financial Scepticism

Another way cui bono has been especially useful is in the world of finance. It’s become ingrained in practically every interaction I have with people looking to ‘help’ my clients.

Every day brings a new pitch in my inbox, extolling the virtues of something clearly not in the interests of anybody but the grifter sending out the spam.

Early on, I’d get swept up in the sales pitch, nodding along as they tell me about the wonderful potential of rolling their loaded dice.

Then my cynicism kicked in and kept asking a version of question – “how does this benefit clients?”.

Over and over.

It’s normally 3-4 layers of asking this before you find out there’s no real benefit to clients, and the primary beneficiary is the person marketing it.

One of our roles as financial advisers is protecting our clients interests. And a solid way to do that is asking this question of every single person trying to push their barrow into our clients financial paths.

After all, as professional financial advisers – the bouncers at the door of a client’s financial security – everything we let past the velvet rope comes with our tacit approval. So we have to clear on just what means for clients.

Watching Bubbles Pop

18 months ago, two things seemed to happen with every person I spoke with:

• They wanted to know my thoughts were on cryptocurrency.

• They were disappointed with my thoughts on cryptocurrency.

“I don’t know enough to comment properly” I would say, “but it seems risky and the potential of losing a lot of money seems pretty high.”

“You don’t understand”, was a common reply.

Fair enough too.

But this is another side effect of the Laundry Cap rule. Unless you know who’s benefiting from you doing something, it’s pretty hard to feel good about doing it.

Obviously, hindsight has ‘proven’ my disappointing and sceptical laziness to have been right, but that’s the luck of the draw.

I couldn’t tell who was benefiting in the great crypto boom, and if the answer to cui bono is anything other than ‘primarily my clients’ then I’ll avoid the latest and greatest fad like a foul-smelling close talker.

Let the Fads Pass You By

I bring up crypto simply to highlight that these fads will come and go. And because they’re a departure from doing the basics of what’s always worked, they need to be sold and marketed and sold.

Which is how you end up with a scruffy kid being seriously entertained as a prophet of a new future…only for it to implode like so many other pan flashes.

If there’s one thing I’d love you to take away from reading this piece – it’s to always ask cui bono when somebody’s asking you to make a financial decision.

Be sceptical.

Ask cui bono.

Then fill your own cap – and use as much as YOU choose!