As I’ve gotten older, I’ve noticed that people who work in the financial industry often give very poor advice to their clients.  Unfortunately, various government regulations make our financial system extremely complex—too complex for many people to navigate on their own.  I have a PhD in economics, and even I struggle with basic questions involving the dense thicket of retirement account options.

This Bloomberg article caught my eye:

Milwaukee Bucks superstar Giannis Antetokounmpo had more banks than letters in his name before Avenue Capital Group founder Marc Lasry stepped in.

The National Basketball Association’s two-time most-valuable player had accounts open at 50 different banks, with each of them holding up to the Federal Deposit Insurance Corp. coverage limit. That shocked Lasry, who co-owns the Milwaukee team.

“I spend a lot of time with them explaining where they should invest,” he said of his players on Thursday at the Bloomberg Wealth Summit in New York. “I’m like, Giannis, you can’t be having accounts at 50 different banks. Let me tell you something, if JPMorgan goes under, your little dinky banks are going to go under too. Let me explain what you should buy, you should buy U.S. Treasuries, you should buy this.”

I suppose the average reader might assume that a billionaire Wall Street investor like Marc Lasry knows more about investing than does a basketball player that grew up selling trinkets on the streets of Athens. In fact, if this article is correct then Lasry is giving inaccurate advice. By investing no more than $250,000 in each of 50 banks, Antetokounmpo is fully protected against a future financial crisis that took down JPMorgan and much of the remaining banking system. Lasry seems to think that Antetokounmpo’s strategy would not work if these smaller banks were to go under. But that’s not true. Might FDIC also fail? Yes, but in that case even Treasury bonds would likely default. While nothing is 100% safe, US politicians would be far more worried about several hundred million Americans losing money because FDIC failed than they would be about a much smaller number of irate T-bill holders.

Antetokounmpo lived through the Greek financial crisis, and thus it makes sense that he would prefer insured bank deposits over other investments. So why didn’t the Bloomberg reporter point out Lasry’s mistake, which is pretty obvious? I suspect it has to do with a form of prejudice that I call “credentialism”. At first glance, it seems as though someone like Marc Lasry ought know more than the typical NBA player about investing.  As a result, our first impulse in these cases is to trust the view of the more credentialed individual.

The media has a reputation of being highly critical. In many cases, however, I find media reports to be excessively deferential to the pronouncements of credentialed individuals working in places such as the CDC, FDA and Federal Reserve.