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Can You Trust Personal Finance Bloggers?

While reading the comments on one of J.D.’s recent posts, I got the distinct impression that many of his readers (and likely mine as well) aren’t yet familiar with the concept of affiliate links or how to spot them.

That’s unfortunate. It means that many savers/investors are being exposed to a significant conflict of interests of which they’re more or less unaware.

Here’s the skinny: Affiliate links are links that allow a blogger to receive a commission when somebody clicks the link and buys (or in the case of bank accounts, signs up for) the linked-to product or service. This is important for people to know because:

  • Some banks and brokerage firms offer affiliate programs, while others do not, and
  • The size of the commission varies considerably from bank to bank or from brokerage firm to brokerage firm.

End result: There’s a conflict of interests between us (the bloggers) and you (the readers). We benefit–in a short-term way at least–when we get you to sign up for the best-paying products and services. You benefit when you sign up for the best products and services.

Be Wary of Review Posts

This blog has roughly 900 subscribers at the moment. If I wrote a post reviewing Ally Bank’s money market account (which I really do use, and really do like), it’s likely that a person or two would sign up (at $40 commission each). What’s relevant here though is that the better I do at selling you an Ally money market account rather than just reviewing Ally’s money market, the more money I make.

Further, if the article ended up ranking near the top of Google search results for “Ally Bank money market” or “Ally Bank review,” the article could turn into an ongoing source of revenue for my business. (And again, the better job I do of selling Ally Bank, the greater the ongoing revenue I’d receive.)

To be clear: This isn’t to say that all review posts are crammed full of lies. I don’t believe that to be the case at all. But when you encounter a review post online, you should know that the blogger likely benefits if you buy the product or service being reviewed.

Common Affiliate Programs

In the personal finance realm, there are several affiliate programs. Some of the more popular ones include:

  • Brokerage firms: Betterment, Scottrade, Zecco, TradeKing, TradeMonster, ShareBuilder, OptionsHouse, optionsXpress, and E*Trade
  • Banks: Ally Bank, ING Direct, EverBank, WT Direct, and HSBC Direct
  • Credit cards: Too many to list!
  • Lending Club
  • Turbo Tax

This is not to say that the above companies are bad companies or that those of us who write about them are dishonest. But it’s no coincidence that you see so many more Lending Club and ING review posts than Bank of America review posts.

How to Spot an Affiliate Link

There are generally three ways to spot an affiliate link, and they all involve checking the url to which the link points. (This can be done by mousing over the link and looking in the bottom left of your browser window.) The things to look for are:

  1. An affiliate tag at the end of the url,
  2. A completely gibberish url, or
  3. An internal link to a redirect file (usually located in a “go” or “redirect” directory).

Example links with a tag at the end of the url:

Example link with gibberish url:

Example link pointing to a redirect file:

Any Questions?

From a business perspective, affiliate programs are here to stay. They’re profitable for both the linked-to businesses and for the bloggers promoting them. (About 8% of my own income is from affiliate programs.)

But it’s important that you understand how they work and how they can influence (whether consciously or not) the way in which bloggers describe a product/service.

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  1. Great idea to increase the awareness of affiliate programs.

    On my own blog, I put affiliate link next to book titles from Amazon, and when I mention to someone that I earn a commission of that link, they are surprised. It seems simple for someone who has used affiliate programs, but the concept is new for many.

  2. I think that bloggers should inform their readers that their views of a product may be tainted by the fact if they get a (potential) income from the company who is selling the product. This would only increase the blogger’s credibility. Honesty is, after all, the best policy in a case like this.

  3. Hi Mike –

    Good writeup on affiliate products & links but I think the title is a little misleading; or perhaps a little too critical of just bloggers. There are plenty of mainstream financial journalists that receive review products themselves who would have conflicts of interest as well. Not the same performance-based relationship but still something that might affect the quality of a product review.

    I make sure to vet everything, any source of information I receive to ensure that I’m only providing the best for my readers.


  4. Hi Blair.

    Please note, the title isn’t saying that you can’t trust PF bloggers. (As a PF blogger myself, I obviously don’t believe that.)

    I’m simply pointing out that it’s worthwhile for readers to ask the question and be aware of the ways in which our compensation might influence the way we present information to readers.

    And you’re absolutely correct that conflicts of interest aren’t exclusive to bloggers!

  5. Any review I’ve done, I’ve used the product. So if you like the product, recommend it, why not get paid for anyone who purchases the product through your recommendation?

    Heck I even got a free book to review and gave it a crappy review. I have no problems being honest, in the end your visitors will be aware of what you are doing. It’s about ensuring trust with your readers.

    I have issue with people who pump a product, but don’t use it. In the PF blogosphere there seems to be a lot of them.

  6. It is really impossible to know. For my part I tend to trust bloggers (or magazines) not to make things up just to sell. However, it is fairly clear that bloggers (and magazines) would tend to talk a lot more about products which they are then indirectly paid to talk about than competing products. It is similar to how fitness magazines, say, and just one long informational about supplements or a lifestyle that would lead to a heavy use of supplements.

  7. I don’t think we’ll ever remove the conflict of interest from any kind of paid or affiliate review. Even if I write a completely objective review on a product that I use personally, there could be some things I’m omitting subconsciously that I should really make known.

    Having said that, when it comes to product reviews, I usually make the decision to write the review first, and find the affiliate program second (not the other way around!). So I’m pretty confident that even without said links, the review would be similar.

    It’s hard to shake the perception that everything we do and say somehow has a financial interest behind it (many people will still think that), but I guess all we can do is build trust and hope people will see that we’re being honest with them.

  8. “I usually make the decision to write the review first, and find the affiliate program second.

    That’s certainly one of the better ways to do it in terms of minimizing the conflict of interests. 🙂

    The downside, of course, is that it may also work toward minimizing revenue!

  9. Indeed. I suspect that the primary result of affiliate programs (in the PF blog niche at least) isn’t dishonest posting but rather a degree of coverage that’s unwarranted solely by the actual merits of the product/service.

  10. When I have affiliate links in a post, I let the readers know that they are affiliate links. Readers can take out my affiliate link part, but I hope they don’t, because affiliate links are an easy, low-key way to support a site.

    On the very rare occasion that I have sponsored posts, I clearly note that they are sponsored at the first sentence of the post. Ads on the sidebar, are, well, obviously ads. 🙂

    I think the key is to be clear and transparent about what’s paid placement and what’s not.

  11. “I think the key is to be clear and transparent about what’s paid placement and what’s not.”


  12. mightymouselives says:

    Thanks. From someone who never thought about it, I found the article useful. Also, fun, if I suspect a writer of puffery, to check out the links.

  13. I think as mentioned the key is to disclose that you have affiliate marketing relationships, and that some links within your post may result in income for you and your site. I think that goes a long way towards building trust with your readers.

    I do review some products that I might not have otherwise, solely because they have an affiliate program – but in the cases where I haven’t used a product, I’ll write up a review of the product with just the facts about the product as I know them, and leave the comments open for open and honest reviews of the products from others that HAVE used them. That way it remains an open and honest look at the product/bank/etc.

  14. Mike,
    I absolutely loved this post! I’ve been thinking a lot about this topic.
    Just a couple of days ago I was reading a post over at The Simple Dollar and Trent had at least 5 clear chances to insert an affiliate link. For example, he was talking about how much he loved Smarty Pig and he didn’t even link it to an affiliate.
    Hmmm. I wonder why they guy has some 77,000 readers – trust.
    I’ll be honest, any time there is an affiliate relationship there is an added incentive to (1) write about it (2) write positive things about it.

    They key is to identifying the tension and communicating that tension to your readers.

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