May 13, 2009

Confusopoly - Reason behind Increasing Complexity of Financial Products

“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”

-Abraham Lincoln

Absolutely wrong! Just go and ask any CEO of a bank, mutual fund house or an insurance company. They can tell how easy it is to fool all of the people all of the time. SBI Life - SMART ULIP is the latest example of this growing phenomenon.

However, the moot question is: why the financial products such as loans, credit cards, insurance or mutual funds are getting more and more complex with each passing day? Is the complexity for the benefit of consumer / investor, or is there something else behind it?

Answer is confusology. Perhaps you’ve never heard of it before and wondering: what does it mean? Actually, the word “Confusology” is coined by none other than Scott Adams, the man behind the satirical comic strip ‘Dilbert’ in his 1997 classic The Dilbert Future – Thriving on Business Stupidity in the 21st Century.

Before discussing it any further, let me tell you that I am a big fan of ‘Dilbert’ and in my view it should be made a compulsory read (along with a course in ethics) in all professional courses (particularly for MBA) because it teaches us more and better about human stupidity and organizational behavior than the entire management curriculum.

Anyway, coming back to the point, confusology means to confuse the customer to such an extent that it’s not worth the time & effort involved to decipher the product or service and virtually impossible to make a comparison with other similar product or services.

To quote Scott Adams, from his recent blog post Government efficiency

“A confusopoly is a situation in which companies pretend to compete on price, service and features but in fact they are just trying to confuse customers so no one can do comparison shopping.

Cell phone companies are the best examples of confusopolies. The average customer finds it impossible to decipher which carrier has the best deal, so carriers don’t have normal market pressure to lower prices. It’s a virtual cartel without the illegal part.”

Read more about Confusology in the following articles:
Confusopoly, or Scott Adams, Prophet of Finance
2. Rise of the Confusopoly

Have you also encountered confusopoly while buying financial products & services? Air your views by posting a comment.


  1. AnonymousMay 24, 2009

    u r 100 % correct,most of the people are victim of cofusopoly & later they realise that they are duped or made a wrong decision. It also depends on awareness & judgement capability of a person .
    A proper analysis & review is required before any deal ,so keep patience go for in depth analysis & then make decision .

  2. Very nice

    One of the reason why people are getting confused is their mindset about Financial planning in India and big companies take advantage of this , sell them products which benefit no one but themselves :) . I checked some of your articles and you are good .

    I blog at , catch me some time over chat , we have lots of things to talk on .


  3. Manish, thanks for your kind words.

    By the way, I’m also impressed with your passionate blogging.


  4. such a informative nice post thanks for sharing. i will share this article in my circle
    Business and Finance


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