Some people think a truly great product will sell itself, just not Mike Ditka.
Yep, Mike Ditka is the latest in a long line of celebrity
sellouts endorsements of financial products. He’s tackling the radio airwaves in Chicago right now, touting the ‘potential’ benefits of an annuity from Dressander.
And why wouldn’t you listen someone who’s net worth is an estimated $44 million? Clearly he doesn’t need the money from some crappy commercial. He’s won two Super Bowls. He owns restaurants. And he’s super smart (especially about investing money). He’s just helping us poor schlubs by spreading this informative message, which is why he’s putting his trust in Dressander. [Cue up disclaimer being read super-fast at the end of an ad: endorsement doesn't really imply actual use of said product or actual endorsement]
For Investment Advisers, The SEC is pretty clear about testimonials or endorsements:
Rule 206(4)-1 under the Advisers Act prohibits SEC-registered investment advisers from using any advertisement that contains any untrue statement of material fact or that is otherwise misleading. The rule broadly defines “advertisement” to include any notice, circular, letter, or other written communication addressed to more than one person, or any notice or other announcement in any publication or by radio or television, that offers any investment advisory service.
In addition, an advertisement may not:
- use or refer to testimonials (which include any statement of a client’s experience or endorsement);
So, the regulators don’t want actual clients on an Investment Adviser’s Linkedin or Facebook page saying stuff like, “He’s honest, OR he always takes my call, OR he took time to explain everything…” That would constitute way too much of an endorsement. Conversely, hiring Mike Dyczko (Dtika’s real last name) to shill an annuity? Totally kosher.
And it must work, or else why would companies keep doing it? So, maybe it’s time to review all the other great (non-endorsement) endorsements you might have forgotten about:
In 1980, several Hutton branches began writing checks greater than what they had on hand at one bank, then making a deposit in another bank equal to the amount it wrote at the first bank. This strategy, known as “chaining”, is a form of check kiting. In May 2, 1985 Hutton agreed to plead guilty to 2,000 counts of mail and wire fraud, as well as pay a $2 million fine plus $750,000 for the cost of the investigation. Hutton also agreed to pay $8 million in restitution—the estimated extra income earned from the fraud.
In 1986. Bill Cosby (America’s Favorite Jello Eater & TV Dad) was paid to bolster their image. (NY Times)
On December 3, Hutton agreed to a merger with Shearson Lehman/American Express. The merger took effect in 1988, and the merged firm was named Shearson Lehman Hutton, Inc. It later emerged that Hutton had faced massive cash shorts as early as 1985, and the firm’s management had tried to put it up for sale as early as 1986. - wikipedia
“We are delighted to have Senator Thompson on board and know this will be a game changer – not just for AAG but for the reverse mortgage industry as a whole,” said Reza Jahangiri, CEO of AAG. ”We look forward to Senator Thompson helping take our brand, company and industry to the next level.” He and his experience will be invaluable as AAG further develops their reverse mortgage platform in the coming months.” Company PR Release May, 2010.
Behind the scenes, the headline from the industry… Reverse Mortgage Volume Falls 35% During 2010
The year? 1984. Dean Witter uses Clarence Beeks, in the wake of the hit Wall Street comedy, Trading Places, shilling simply being in-the-know somehow… (It was probably that leaked Orange Juice report, right?)
And who doesn’t love Tommy Lee Jones? I mean he’s a three time Oscar nominee, and clearly a big believer in Ameriprise’s commitment to putting all of their clients first — well except the time they were letting some of their (presumably largest) clients market time with mutual funds.
Et Tu, Betty White? Et Tu’?
And, the Pièce de résistance…
November 3, 2011 LA TIMES: Goldline metals dealer is charged. The Santa Monica company that used radio talk show host Glenn Beck as a pitchman is accused of tricking customers into buying gold coins at inflated prices.
Yep, it’s a good thing the regulators don’t focus on product endorsements of the celebrity-kind, because clearly THEY are the financial professionals we should all be listening to…
Indexed Annuities – Da Coach Likes Them, Should You? — Chicago Financial Planner
Gold Coins, Emergency Food, & iPads – I Heart Wall Street
Carnival Barkers And Diet Pills – I Heart Wall Street
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