On "expert" financial advice

This is a short summary of some points made in a Buttonwood column from the Economist 6/9/12, page 80.  The column was sparked by a research paper "Why to people pay for useless advice? Implications of Gamblers and Hot-Hand fallacies in False-expert Setting"  - Institute for the Study of Labor, May 2012

While there are some basic bits of financial advice that research has shown reliably improves portfolio performance, those bits of proven advice are few, and one only needs to be reminded of them from time to time.  Not nearly often enough to generate enough fee's to make a living as a financial advisor.  So a huge industry exists of financial advisor's churning out research to predict short term market trends - research that historically is most notable for its lack of predictive utility.  

Studies have shown that financial guru's on average do no better than, and often worse than index funds.  Sometimes a financial guru will have a couple really good years, but those years are usually followed by really bad years.


Why do people rely on financial advice when the data says it is often basically wasting money?  Avoid responsibility for making mistakes?  Not have to face the fact there is much that is random in the investing world?  Not willing to accept that patience is more important to long term investment success than cleverness?