The struggle is very real to say something new and exciting every day or week.
The struggle is very real to say something new and exciting every day or week.
Imagine that you've just been appointed editor of a once popular, but now struggling, weekly dieting magazine. The publisher suggests as a front cover for your maiden issue – "Scientists Reveal: Weight Loss Secrets".
You dutifully work on the theme, deciding to expand the headline to "Scientists Reveal: WeightLoss Secrets – Eat Less, Exercise More".
As it turns out, this particular cover story captures the public's imagination, ensuring your maiden issue breaks all circulation records.
Your publisher is naturally pleased with the sales numbers but perplexed at the same time.
"You've hit the jackpot with this one," the publisher tells you, waving around the circulation sheet.
"But did you ever ask yourself what you were going to run with NEXT month? 'Eat Even Less and Exercise Even More' perhaps?"
The publisher marches around to the other side of the desk and sits in the chair alongside you. He picks up a copy of the magazine and flicks through the pages, stopping at the big display ads along the way.
''You see these advertisements? Diet pills, supplements, health retreats, hypnotists … these ads pay for your salary and mine. And these companies will not be happy if we keep telling people that losing weight is just a matter of getting off their couches and eating more healthy stuff.
"So … make this issue a one-off, will you?" the publisher hisses as he ushers you to the door.
''Next week, run with 'Ten Painless Steps to the New You' and spotlight that guy with 'The Lemonade Diet' book."
This story, which is closer to the truth than you might think, echoes the sort of pressure that editors of popular money magazines and financial newspapers often find themselves under as they struggle to say something new and exciting about investments every day or week.
Just as we know that losing weight ultimately depends on eating less and exercising more, sound investment boils down to a handful of principles – focusing on the long-term drivers of returns, diversifying broadly, watching costs and working with an adviser to tailor an asset allocation that is right for your risk appetite, circumstances and goals.
Nick Stewart
But as editor, if you push that every day, you will lose your leadership and job. So instead, you keep the advertisers happy and write cover stories on "Six Stocks to Kick Start Your Portfolio", "Make Money in Any Market" and "12-Month Get Rich Plan".
At one level, there is nothing particularly wrong with this. Commercial media is, after all, a business. Its priority is to keep its shareholders happy. It does that by keeping its advertisers happy. And it keeps its advertisers onside by delivering content that attracts the eyeballs of readers and viewers.
But these are now desperate times in the media. Pressures to produce eye-grabbing content have become more intense as the availability of free real-time content on the internet has undermined a once successful economic model, one in which advertising subsidised quality journalism.
With little or no growth in circulation or ratings, there has been a major drive to cut costs. This has meant fewer resources for financial journalists, who find themselves stretched ever more thinly. Quantity rather than quality of output becomes paramount, so journalists end up barely rewriting press releases drawn up by savvy PR professionals.
This sausage factory mentality is what has become known as "churnalism", a phenomenon noted on Britain's Fleet Street by Guardian journalist Nick Davies, who wrote a book on the theme called Flat Earth News.
Davies' thesis was based on research by the journalism department of Cardiff University in Wales, showing some 80 per cent of a sample of 2000 news stories came from second-hand material supplied by news agencies or the PR industry.
In this new world, where spin doctors reign supreme, the media's traditional role in protecting the public from deception has been eroded to the point where distortions and propaganda are regularly presented as truth and marketing is dressed up as consumer "information".
This explains the source of all those fad diet stories, as well as the prominence given to stories representing speculation as investment.
This is not to deny that the financial media plays a vital role in an open society, particularly with the transfer to individuals the risk of making decisions about how they invest for their retirement. And there is a lot of very good and perceptive analysis out there if you know where to look.
But it's important to understand the media's agenda and how commercial pressures, due to structural changes in the economy and the need to fill more and more space with fewer and fewer resources, are dissolving the Chinese walls between advertising and editorial. The Fourth Estate isn't what it was.
• Nick Stewart is an Authorised Financial Adviser and CEO at Stewart Group – a Hawke's Bay-based CEFEX certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance and KiwiSaver solutions.
• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
