by Jack Waymire
Real radio and TV personalities who report financial news are not acting as part-time financial advisors. They have full-time jobs being radio and TV news reporters. So what does it mean for investors when these personalities also sell investment and insurance products? They should come with major warnings. See SEC Bans, Fines Radio Host Ray Lucia Over ‘Buckets Of Money’ Claims
First of all, these part-time advisors may have purchased the radio or TV time. They are not there because they are experts in their fields with large numbers of followers. This strategy was implemented to develop some name recognition and trust on their “shows”. Over time, investors who listen to them, begin to believe they are financial experts. The investors fail to realize two things. This is a marketing strategy for the financial advisors. It is the advisor’s way of building name recognition and generating prospects for his sales activities.
Many of these advisors also use free offers to get their listeners and users to submit their contact information. This is also a suspect marketing tactic. There are no free lunches. The advisor buys lunch and you buy investment or insurance products that produces $10,000 of commission for the personality/advisor. You might say that this was the most expensive lunch you ever paid for. You would be right, which also explained why the advisor offered to buy lunch.
This type of marketing is based on deception. Investors think the perpetrators are radio or TV personalities who are advisors in their spare time. In fact, it is just the opposite. Most of the time, they are advisors first who chose to buy radio or TV time to meet investors. By the way, these advisors have to sell a lot of product to justify this amount of marketing expense. This is definitely a buyer beware situation.
If you are going to buy an investment or insurance product from this type of advisor, make sure you obtain full written disclosure for the advisor’s education, certifications, experience, compliance record, compensation, and services. Also, be sure to check the advisor’s compliance record yourself at FINRA.org and SEC.gov. It pays to be cautious when your assets are at stake. Do not cut corners even if the advisor is a TV personality.
Jack Waymire worked in the financial services industry for 28 years before he left to found the Paladin Registry (www.PaladinRegistry.com) in 2004. This investor education website was based on the Principles in Jack’s first book: “Who’s Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor.”
The Registry also has a free service that matches investors to advisors who meet Paladin’s minimum requirements for competence and trustworthiness.
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