The fact that financial firms are massively profitable does indeed suggest that it's an inefficient market. In an efficient market there's "no free lunch"--bec

The fact that financial firms are massively profitable does indeed suggest that it's an inefficient market. In an efficient market there's "no free lunch"--because somebody else comes along and eats it. If the financial sector were efficient, competition would drive down profits. This is in fact happening to some extent with passively-managed index funds like Vanguard taking up a larger and larger share of investors' deposits, but it's been a surprisingly slow process.