Your Funds

“There’s a lot of money in the money business.”

In the world of the modern financial blogger, podcaster, celebrity financial adviser and journalist turned radio host — and yes, that means me — an increasing amount of money is being thrown around to buy influence and insights and to directly attract money.

It leaves consumers in a tricky place, unsure of where the lines of ethics and morals are being crossed and who they can trust.

In the old days — which were not so long ago — when mainstream media was the dominant information source and people got personal-finance news from their local paper, their favorite radio show or their trusted television source, there was a separation between advertising and information.

There was advertising — clearly delineated — and editorial content. In decades as a newspaper and online financial columnist, I never once was offered money in exchange for a mention in my column.

Same for my radio show. My employers sold ads and paid my salary without influencing my work; I covered anything I felt the audience should know, without regard to offending/supporting advertisers.

I still do that today, although the podcasting/blogging world has made it clear that such standards are not the norm.

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Where the world of financial journalists — I am a past president of the Society for the Advancement of Business Editing and Writing — was consumed with ethics and run by idealists, the community of bloggers and podcasters is overwhelmingly concerned with how to line members’ pockets.

The internet is abuzz with people telling you how they got out of debt or how they plan to retire in their 30s or 40s, and how you can follow their example to a lifetime of relative prosperity and/or leisure.

The biggest curmudgeon in finance — and some people think that’s me — would have to admit there’s a lot of good stuff out there, content that is entertaining, funny and highly informative.

But mixed in with all of that is a dark side that no one talks about, where your favorite experts are cutting deals to promote others in the financial world, making their platforms the launchpad for accessing the money to be made in the money business.

The prominent current example involves Jordan Goodman, whom I’ve known since the 1980s and who spent two decades at Money magazine before carving out a niche as the “Money Answers Man.”

I appeared on Goodman’s show last year — he was a guest on “Money Life with Chuck Jaffe” — and on previous iterations of his show.

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When talking with me, Goodman never pumped bad investments or scary financial services; I get testy when advice sounds hazardous to someone’s wealth.

But what Goodman discussed out of my earshot apparently was a different story.

In December, the Securities and Exchange Commission (SEC) said Goodman had acted as an unregistered agent for Woodbridge Investments, a $1.2 billion Ponzi scheme. His endorsements and praise allegedly persuaded investors to send more than $140 million to Woodbridge, for which Goodman was paid $2.3 million.

The charges were settled almost instantaneously, with Goodman repaying what he earned plus $315,000 in interest and $100,000 in fines; he accepted a lifetime ban from the securities industry without admitting or denying the charges.

And his show goes on. His “Money Answers” show and site may have lost sponsors, but they’re still going because, legally speaking, you can talk about money without being “in the securities business.”

I didn’t attempt to reach Goodman; regulators slapped him with a standard prohibition on declaring innocence, but he did say before settling that he didn’t know Woodbridge wasn’t operating the way he described while promoting it.

Truthfully, he should have known better.

After leaving Money, he wrote “Everyone’s Money Book,” a terrific soup-to-nuts primer on all things financial.

But the first version of that book was co-authored by Sonny Bloch, a broker-turned-1980s popular nationwide radio host-turned convicted Ponzi criminal. Being that close to a past fraud, I’d like to think he could smell trouble.

But Goodman had incentive to hold his nose and ignore any whiff of trouble.

And that same incentive pays the bills for many successful financial podcasters and bloggers.

Take someone who started a blog about getting out of debt and living the good life, give them the opportunity to monetize that platform, and they’re going to jump at the chance.

You may never even know it’s happening.

Often, it’s through “affiliate marketing,” payment for steering an audience to try a product, subscribe to a newsletter or simply to follow certain links.

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There’s nothing inherently wrong with affiliate marketing; know what to look for and you’ll find it on podcasts run by National Public Radio and virtually every major news organization. And many affiliate deals are benign, simple links in traditional advertising.

But it can cross a line, as in Goodman’s case, at which point integrity is lost.

For all the concerns over “fake news,” this is fake endorsements made to look real, a problem so blurry that experts often can’t tell the difference. It’s why — without a deeper dive — Goodman’s show didn’t set my alarms off.

Mind you, I realize this seems a bit like the pot talking about the color of the kettle.

I’m in the money business to make money. While I live by traditional journalistic standards, my show can’t succeed without sponsors. I’m very picky about the few I work with (I have yet to do affiliate deals).

I’ve found that marketers who pay the most tend to be pushing products that are the worst for the consumer — they MUST overpay to persuade someone to hawk their junk — and my ethics and morals aren’t for sale.

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But the backbone of your favorite sources of information may be under attack these days. If you don’t know how far they are bending, ask questions. Be wary of endorsements, affirmations and other promotions, and do your due diligence.

Live by the proverb “Trust, but verify.” Failing that, you’ll need to have good luck in your search for good advice.