During Tom Bradley’s welcoming speech at the 14th annual TD Ameritrade Institutional conference last month, the ebullient Mr. Bradley was waxing on about certain (to him) incendiary remarks made by a certain executive at a major wirehouse firm on a cable TV show. This executive had appeared on CNBC several weeks prior to his speech, disputing the notion that the wirehouse model was somehow flawed, and that clients of those big Wall Street firms found it comforting to be affiliated with a major bank in such uncertain times.
Now in high dudgeon as he recalled listening to those remarks, and reaching an emotional climax that was clearly appreciated by the 1,200 or so RIAs who were attending the conference, the long-time president of TD Ameritrade Institutional wondered rhetorically why those CNBC anchors didn’t call this executive on such a preposterous statement. From deep within the audience a voice shouted out, “Who advertises with CNBC?”
Advisors, burned one too many times by mutual fund wholesalers or conflicted investment banks or broker/dealer recruiters or LP snake-oil salesmen, are now not merely skeptics but full-blown cynics when it comes to just about everybody in this business except their clients and their employees or partners. When it comes to financial services companies in particular, advisors rightly turn a gimlet eye on those who claim that this time it’s different, and on those who winkingly repeat the mantra that past performance is no guarantee of future results but then suggest the opposite.
These days, the popular media is scorned either because it sensationalizes both the ups and downs of the markets and the economy, or trivializes the role of professional advice-givers. The most egregious suspicion is that the media is in thrall to advertisers or sponsors, that we are really just holding out for the highest bidder and will provide positive coverage in return, much like the Praetorian Guard in the waning days of Rome’s glory sold the emperor’s position for sacks of gold.
I can’t speak for CNBC, but the truth is that at Investment Advisor we’re not for sale. Content is either all advertising or all editorial; there is no such thing as “advertorial.” Something is either clearly an advertisement or is clearly unbiased editorial. I have the authority as editor to deny an advertisement or demand changes to an advertisement that looks too much like an editorial page. I am far from perfect and have made mistakes in my career, but our solemn ethics code (well, as solemn as journalists ever get) forbids us from mixing advertising and editorial.
Our publisher, to whom I do not report, understands and appreciates that unsullied, independent editorial coverage is what any advertiser really wants, since our editorial credibility is our most precious possession. Not all advertisers, or potential ones, get it, however. A marketing person for a growing mutual fund company told me, with a straight face, at that same TD conference that her firm would consider buying a series of ads with us if we put their star money manager on the cover. I politely set her straight. Unfortunately for her star money manager, knowing that someone in his company would have such a cavalier ethical attitude makes it much less likely that I will ever spotlight him or his fund. Yes, part of our job is to expose you to what the financial services industry has to offer, and part is to protect you as well, sometimes by not giving coverage to a company or product or service. That’s true whether they advertise or not.