The pernicious power of financial advertising

Financial advertising

The incendiary resignation letter from Peter Oborne cites the removal of articles from the Telegraph’s website , claiming the articles went because of pressure from HSBC as a major advertiser.

Buzzfeed have the story (and the article( here).

I know nothing of HSBC (other than I bank with them and that First Direct is a model of probity), but I know a lot about the pernicious power of financial advertising.

The greater the dependency of an organisation on advertising revenues, the harder it is to remain independent. This goes not just for on the page (including webpage) advertising but the more subtle sponsorship of events and even education.

What starts out as an altruistic venture, quickly turns into a search for “ROI” as advertisers seek a return on the investment. Necessarily there are conflicts between what is good for the advertiser and what is best for the reader/member even pupil.

The dead hand of advertising impacts on the great pension debates we are having. The vested interests with the weight of advertising behind them stifle and distort debate. Few organisations can rise above the “they would say that” test!

This works at a personal as well as a strategic level.

It is so hard to maintain editorial independence when your bonus or the very funding of your job is dependent on the ongoing support of the organisation that you are exposing. Which is why (whether there is substance to these allegations or not), I instinctively side with Peter Oborne.

For it’s first 12 months, when its transactional revenues have not been sufficient to match development costs, my own venture, www.pensionplaypen.com has benefited from revenues from NOW and Legal & General and ITM. I hope those organisations benefit from this advertising but they know very well that I will not promote their product because of their advertising.

I have been very impressed by Legal & General, especially since they have moved their investment and workplace pension teams into one. I continue to be impressed by NOW but have been critical of some aspects of their proposition both on my blog and in the pension press. ITM’s middleware has never been directly promoted as part of our solution.

I know how hard it is to remain independent and my thanks to my advertisers is for their understanding that the value of our service is nothing if we are anything less.

The big loser in Peter Oborne’s resignation will not be HSBC, the stories about their inadequate accounting remain on other influential websites, it is the Telegraph.  But by association, financial advertising in general, which when it sits alongside editorial or conferences or “educational” programs, inevitably compromises.

Looking around my flat, I can see a pen from OPDU, a notebook from JLT , even a plastic piggybank from Hampshire County Council.  My rucksack is emblazoned with a NOW logo. I am a tart for tat!

But the inducements rule, that my company follows scrupulously , recognises that the greatest care needs to be taken in attending conferences, or educational courses , even reading articles which (by dint of surrounding articles) may become advertorial.

Www.pensionplaypen.com is now advertising free, as is this blog, as is the www.firstactuarial.co.uk. I have to pay www.wordpress.org to have the ads removed from here!

We may take more advertising but those advertisers know that it will not purchase a blind eye to imperfections. Nor will it lead to sponsored articles where the words of the Pension Plowman are written by those paying him.

The bravest and best advertisers are those who continue to support a venture through thick and thin (witness Morten Nilsson’s stoical response to criticism of his service which you can now find at the bottom of yesterday’s blog).

In the short term , advertising can achieve a return on investment by obstructing editorial independence, but in the longer term, the divide between the editors desk and those in marketing must be scrupulously maintained.

There are no short-cuts for independence.

Ironically, the product that has most value on my sites is independence. Organisations that want to buy into this commodity can do so knowing that they will be treated in exactly the same way whether they pay us money or not.

If you want to associate yourself with our high standards, then we’re happy to take your money as it allows us to develop faster and improve the buying experience for others. It will also allow us all to eventually get paid for this endeavour.

So here’s a bit of free advertising for those who have stuck with us, we’re grateful to you , but we’re not in your debt!

 

NOW_RGBlg-logo

 

Ease

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in advice gap, auto-enrolment, First Actuarial, Pension Freedoms, pension playpen, pensions and tagged , , , , , , , , , , , . Bookmark the permalink.

2 Responses to The pernicious power of financial advertising

  1. brianstansted62@hotmail.com says:

    I like this Playpen blogsite. I rarely agree with the things that Henry writes but I do admire his values and his ability to maintain an independent standpoint. It is interesting how different professionals have a different perspective of the same thing or same company. When I attend seminars or workshops it is a common theme from advisers that L & G are criticised for the lack of service and help provided to them. But there need to be checks and balances. It would appear from what I read on here that the focus from Henry is all to do with driving down the cost of investment and to get more and more people to self-serve. Whereas my perspective is far more from the other end of the scale, looking at the best service that can be provided, and recognising from actual experience of real people that most of them are not capable of taking the time they should take to make good or even just adequate financial decisions. Very often it is not that people are incapable of analysing their situation it is just they do not want to do this and will not do this. So my view is that advice is a valuable commodity and that it is better to pay for advice and do the right thing than it is to pay peanuts but do the wrong thing. So I find it useful to listen to the focus on costs because it keeps my mind focussed on how I need to justify what I do to clients, and how what I do for clients has to add true value. My informal definition is that after taking into account the costs of my services and the recommendations that I make the benefits outweigh these costs. I find this blog site a valuable source of opinion and expertise and enjoy the thought provoking articles. Henry is only able to provide this source of information and opinion by being intellectually independent. So I thoroughly agree with the point made in this article about avoiding the temptation to let providers, advertisers and suppliers induce you into recommending them when your analysis tells you not to.

  2. henry tapper says:

    Spot on Brian, and I am enjoying reading your excellent posts. I say it as I find it, the view are mine and mine only. I can perfectly understand why L&G are harder to deal with if you are an IFA than if you are a firm like First Actuarial or Pension PlayPen.

    Having been a regulated adviser for the first 15 years of my career, I know how hard it is to maintain the independence you refer to and I have to tip my hat to my current employers to allow me to speak independently of them and to anyone else.

    This blog, if it ‘s liked is an advertisement for First Actuarial’s attitude not just to its staff, but to it’s clients!

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