Get an inside look at TAFY - and why our personal finance tips are really personal…
Ric Edelman: You're listening to The Truth About Your Future. Let's go to the telephones. We have Mark from Madison, Wisconsin, with us on the air. How are you doing, Mark?
ASK RIC: Mark from Madison, WI: Doing well. How are you today, Ric?
Ric Edelman: I'm doing very well. Thanks so much for calling in. I really appreciate it. What can I do to help?
ASK RIC: Mark from Madison, WI: Yeah, I had a question for you. I've listened to your show for many years, Truth About Your Money and now The Truth About Your Future. And I know as part of that conversation, a lot of times you'd talk about interviewing financial planners, and obviously that's not necessarily the point of your show. But one of the questions that you would have people ask is, is how is your financial planner compensated? And I know with your new show, you're obviously operating a little bit differently. So you're able to talk more about specific products and you have certain companies come on and things like that. And I'm just curious, in your new format, how has that changed and does that, I guess, impact some of the advice that you give?
Ric Edelman: Oh, yeah, that's a really great question. Let's talk about the economics of this program. I mean, this is a really important question because you've always got to ask what's the motivation of the people that you're listening to and that the people you're talking to, whether it's a stockbroker telling you to buy a stock or a surgeon recommending surgery or a talk show host talking about an investment, you know, so, yeah, you're asking a really important question. This is all in the category of what we'll call influencers, right? And I guess that's what I am these days - an influencer trying to talk to folks about different things. So to understand this, let's go back to my old radio show when I was the host of the Ric Edelman Show for 30 years and operating under Edelman Financial Engines, the firm that Jean and I founded back in 1986. The purpose of that show was obviously to provide financial education, that was first and foremost, and at the same time, you know, oh, by the way, if you're looking for a financial advisor, feel free to call us. And I still encourage you to do exactly that with Edelman Financial Engines. I'm still the founder of the firm, still on the board, still a big individual shareholder of the company, still strongly endorse and believe in the work that all the financial advisors, most of whom I've trained personally there, still encourage you to do that.
The new format…And now a word from our sponsors…
Ric Edelman: So that radio show was sponsored by the company Edelman Financial Engines, with the goal of providing financial education and oh, by the way, exposure to encourage folks to consider hiring us as advisors. That was then. Today, my new media company, The Truth About Your Future, this broadcast and podcast and all of the work that I do is now the traditional media approach, meaning it is advertiser- sponsor- driven, just like every television show that you see. There are only two models in the world of media. It's either sponsor-driven or it's subscriber-driven. Think of, you know, Netflix is a great example. You subscribe to Netflix by virtue of paying for the subscription, they skip the ads. So you don't have to have advertisers because the users are paying for it. Facebook is free, but you get bombarded with ads. So companies have to generate revenue one way or the other. They're either going to do it from you paying subscriptions or they're going to do it from the advertiser. Some like to have it both ways, like magazines. You pay to subscribe and there are ads. So they kind of do it both ways. This radio show, this podcast is sponsor-driven. You're not paying to hear it, you're enjoying it for free, but you've got to tolerate the ads.
Why we personally endorse products and services featured on the show
Ric Edelman: So the question that I had to face in figuring out the economics and dealing with all the radio stations where this show airs, you know, it airs in 30 markets all across the country, was who are going to be the advertisers? You know, the big concern I have ethically is that I'm bringing a pretty big audience because people like what I do, they like the information and the content that I provide. People have learned to trust me. They know they can rely that the information they're hearing is objective and it's legitimate. And I'm not trying to sell them something. I don't have a conflict of interest and all that kind of good stuff. So my reputation really matters an awful lot to me. I have to be therefore, very careful as to who the advertisers are who are going to be advertising on the show. So the deal that I struck with the radio stations was very simple. I said, I'm going to control the entire hour. I will handle the advertisers and the sponsors, and I will go seek out advertisers who I can personally endorse. Advertisers who are providing investment strategies or solutions or investment products like ETFs or other investments or brokerage accounts or what have you, that I personally own, that Jean and I personally invest in that we personally can endorse and recommend.
Ric Edelman: So you do need to be aware of that fact that when you hear an advertiser on the show, you can be confident that I personally endorse that organization. I personally use that investment, and that's why I think it's worthy for your consideration. And in fact, I'll go a step further. Those advertisers, they're hoping that a certain portion of my audience will, in fact, turn to them for their investment strategy; that you'll use the investments. So if you want to help me stay on the air and you want to use investments that I think are worthy of your consideration, I'd encourage you to go to my sponsors. There are only six of them: Choice, which is an IRA custodian, where you can buy digital assets as well as mutual funds and ETFs. The website that they offer is RetireWithChoice.com/Ric. You can of course go to Edelman Financial Engines, the company that I founded, at PlanEFE.com/Ric. If you're looking for investments in digital assets, BitwiseInvestments.com. Exponential technologies, ETFs offered by GlobalXETFs.com and Invesco.com/QQQ. And if you're looking for a brokerage firm where you can open an account, manage your assets, buy investments, Schwab.com. And if you're brand new at this Schwab.com/StarterKit. So I hope you'll support the advertisers who are supporting me so that everybody wins.
Producing content in a unified way without conflicts of interest
Ric Edelman: But regardless, you do need to be aware that this is an advertiser model. And with luck, we're all working together in a unified way without conflicts of interest. And you need to ask the question of everybody you encounter when you go to a website and you're reading an article by somebody, if you're reading a magazine article or a tweet or a blog or watching a TV show or a radio show or a magazine article, you've always got to ask, why did they say what they're saying? Are they being paid by somebody to say it? Have they disclosed it and what is their relationship? Because too often these kinds of conflicts of interest can occur. Influencers have been criticized in many cases for either not disclosing their financial relationships or flat out creating an endorsement strictly because they're being paid to do so. This happens often with Hollywood celebrities who are doing late night infomercials, right? They're selling gold or they're selling reverse mortgages or who knows what. It's obvious the only reason they're touting it is they're getting paid to do so. I'm doing my best to stay away from that problem, and I hope that this resonates with you and that it makes sense.
ASK RIC: Mark from Madison, WI: Yeah, no, I appreciate. That's very helpful. And I kind of felt that was the way it was. Because you always say, these are things I use and that, but I'm with you, right? I'm always, always kind of wondering, what's the model, what's the purpose, what's the driver? So I appreciate you explaining it.
Ric Edelman: And I just have to tell you, Mark, it's a really, really important question that you've asked. I applaud you for the courage in asking it, and I hope everyone else will follow your lead and do the same with everybody you're interacting with. Ask the question: Why are you saying what you're saying; what's in it for you? Because there's too much conflict of interest, lack of transparency. The more we know, the more disclosure there is, the better off we'll all be. So, Mark, thank you very much for your question. I really appreciate your asking it.
ASK RIC: Mark from Madison, WI: Thank you, Ric. I appreciate it.
Ric Edelman: That was Mark in Madison, Wisconsin, here on The Truth About Your Future. You can do what Mark did. Got a question for me? No matter how challenging it might be, just contact us. AskRic@TheTruthAYF.com.
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