Is the term “Smartphone” an oxymoron?

Is the term “Smartphone” an oxymoron?


“Smartphone” is a brilliant marketing term because it helped to sell millions of cell phones at higher prices.  The added tools provide increased technology, efficiency and convenience to quickly send and receive messages, check balances and execute transactions in the bank, brokerage or 401(k) accounts, or download hundreds of apps to perform previously unheard of tasks that we now rely on.  I can’t imagine living without my smartphone today, but at times I wonder how “smart” it is.

Performing routine tasks efficiently and quickly is a great time management option.  Examples include checking the weather, sports scores, stock prices, traffic conditions, or different credit card or bank statements.  Making reservations at restaurants, setting a timer for the parking meter, maintaining a record of my exercise program, calculating calories, keeping a wine inventory or “to do” list is convenient.  These quick tasks that take little thought can and should be performed on a smartphone.

However, decisions that require reflection and judgment are a different matter.  The ability and temptation to act without thinking in matters of great importance often leads to bad results.  Financial, retirement, and investment decisions frequently improve with thorough planning and consideration of alternative strategies to achieve the desired results.  In such cases, the smartphone becomes the dumbphone.

Our goal is to help clients make smart decisions with their money.  Acting without planning is like shooting a gun without aiming. 

An article entitled, “Why I Don’t Make Financial Decisions On My Smartphone”, appeared in The New York Times on March 25, 2016.  The author, Schlomo Benartzi, a professor at the Anderson School of Management at UCLA , recently conducted a study at Duke University and concluded that people taking a test of financial literacy on a smartphone did “significantly worse” than those using pen and paper. Participants understood less of what they read and made shortsighted choices.  

Multitasking resulted in less focused attention.  Another study referenced in the same article “found that people ordering their pizzas online chose those with 33 percent more toppings, 20 percent more bacon and 6 percent more calories.” Tools to make our life easier are great for simple tasks, like calculations.  Where judgment is required or making a choice between two potentially correct scenarios depending upon your view of future events, quick financial calculations often lead to making dumb decisions with our money.   John Wooden, the famous basketball coach from UCLA, said, “Be quick but don’t hurry.” 

If the future is always like the past, if passive investing always beats active stock analysis, if value always beats growth, if the cheapest mutual fund always outperforms the more expensive, then machines will make better decisions than humans.  It assumes that humans can precisely communicate their needs, wants and feelings to the machine.  In the future, smartphones will improve technically, but will humans?  Both have inherent limitations and are highly complex. 

In some areas we are looking for one correct answer.  In others, the answer may depend upon considerations that are highly personal.  Financial planning, like medicine, psychology and psychiatry, involves both science and art plus collaboration to find the best diagnosis, recommendation or options for one client or patient.  Smartphones are fantastic tools but they don’t collaborate.  Skilled physicians and Certified Financial Planner® professionals still deliver higher quality results than the quick and easy tools.   So we wonder if the term smartphone is an oxymoron.