Hosting radio shows helps advisers attract clients

Radio shows can establish an adviser's credibility and help win new clients, but they don't always pay off

Feb 28, 2016 @ 12:01 am

By Christine Idzelis

Marc Freedman, chief executive of Freedman Financial in Peabody, Mass., got his start in radio in 2012. He paid $2,000 a week to host an hour-long, live call-in show every Sunday at 4 p.m. on a major talk-radio station in Boston, 96.9 FM. As part of his arrangement, he got a producer and a series of promotional ads over the course of the week.

The only thing he didn't get was clients. In the first year, he gained just one or two.

Then he got lucky. About a year into his radio gig, the station "decided to go to hip-hop," Mr. Freedman said. That left him without a show until he got an unexpected call from an old high school friend working for a smaller station near his office.

His friend wanted to know if he would be interested in doing a pre-taped, financial show airing Sunday mornings for a price of $450 a week. Mr. Freedman took the deal hosting Dollars & Sense on North Shore 104.9 FM radio in Beverly, Mass. His show covers a 30-to-40-mile radius, reaching 90% of his market. From then on, business boomed, he said.

Mr. Freedman said his show is attracting revenue that's three times his annual outlay of $40,000, which includes his weekly payment for airtime and related ads, plus additional advertisements promoting just his firm. "We probably get six to eight new calls from [potential] clients a month," he said, and, "I probably take one or two."


A radio show can establish a financial adviser's credibility and reputation and help win new clients. "It's an hour-long advertisement for your firm," said Matt Halloran, president and founder of Top Advisor Coaching in Portage, Mich.

"All of a sudden you're the money guy in the community," said Mr. Freedman, whose firm has about $300 million of advisory assets and targets mass- affluent baby-boomers with a total net worth of $500,000 to $2 million. "I get to drive my own message."

But it's a marketing gamble that doesn't always pay off, partly because the number of listeners tuning into local stations is often unknown. Then there's the risk of running afoul of federal regulation meant to protect investors, as well as fierce competition for popular channels that may drive advisers into cheaper, ill-suited slots.

A radio show is like beachfront property. There is very limited availability— Ric Edelman,  Edelman Financial Services

Few advisers make it as big as Ric Edelman, who has built a radio empire from his headquarters in Fairfax, Va., where Edelman Financial Services oversees more than $15 billion in assets for more than 30,000 clients in the U.S. He began hosting a financial advice show on WMAL radio in Washington in the early 1990s, which at the time was a new concept, according to Mr. Edelman.

"I was a paid host to do the show," he said. "That model doesn't really exist anymore."

The Ric Edelman Show now airs on 67 stations in 62 markets from coast-to-coast and Alaska, reaching more than a half-million listeners weekly, according to his producer, Rick Fowler. Mr. Edelman is in 16 of the top 20 radio markets, where listenership is concentrated, he said. The top 20 markets make up about 42% of listeners in the total 300 U.S. radio markets rated by Nielsen, according to Mr. Fowler.

"A radio show is like beachfront property," said Mr. Edelman. "There is very limited availability" for desirable times on prominent stations, he said, and to be successful, advisers need to be able to deliver informative content in "a very highly entertaining way."


It's a challenge that Mark Pearson, founder and CEO of Minneapolis, Minn.-based Nepsis Capital Management Inc., is ready to take on. Starting today, he'll begin hosting a live radio show from 4 p.m. to 5 p.m. five days a week on local business channel 1440 AM.

Under the agreement with a local station owned by Salem Media Group, he's paying $30,000 to $35,000 for airtime in the first year, according to Mr. Pearson. He plans to talk about the news of the day and educational topics related to personal finance, as well as take questions from callers.

The Minneapolis station reached out to his office in January as it was looking to fill slots, he said, adding that he's able to do the show from his office, saving him from the daily commute. Mr. Pearson said he was able to negotiate a lower price for airtime because the number of listeners is unknown.

"We're hoping we can get synergies," he said. "It's a business channel whose demographic is more white-collar."

Nepsis, which is Greek for watchfulness and "ultimate clarity," oversees about $280 million of assets, according to Mr. Pearson.

While the show will air locally, "the real bang" in his deal is that it will also play over the Internet on iHeartRadio, extending his reach across the U.S., he said. He believes that cars will increasingly come equipped with Wi-Fi, allowing more drivers to listen to radio online.

Not everybody's sold on radio. After about a year on the air, Margie Shard, CEO and owner of Shard Financial Services Inc., could no longer justify the cost of doing her radio show in Michigan. She did her last show this month and doesn't miss it.

Shard Financial, an independent adviser affiliated with brokerage firm LPL Financial, provides financial planning and investment strategy services for about 280 households in Michigan and other states, including Ohio, California, Florida, Louisiana and Arkansas.

"It's a big investment," said Ms. Shard, who spent about $50,000 a year for an hour-long slot each Sunday at 10 a.m. on Super Talk 1570 AM radio serving Genesee County and its largest city, Flint, Mich.

The outlay included the cost of airtime plus what she spent on related advertising, she said. The show also aired via iHeartRadio, but wasn't finding much traction there either, she said. Other problems: She never knew the size of her listenership; it wasn't paying off in new clients; and the station's other programming wasn't always the right fit for her politically.

Ms. Shard, who describes herself as independent of any political party, didn't listen to the station prior to her gig and was surprised at how conservative some of the remarks were on the other talk shows. Flint is a union town, she said, which to her mind suggested a tradition of left-leaning politics. "You don't control the other programming," said Ms. Shard, which may impact branding.

"It was so far to the right that it made me uncomfortable," she said, adding that a couple of her clients had bristled at some of the social commentary they heard on the air.

Ms. Shard also won't miss the 20-minute commute to the station to tape an hour-long show. "It's a relief," she said. "I have a busy practice. My day is pretty back-to-back."

She looked at switching to a station in the Detroit metropolitan area, but estimated the cost would be three times as much annually, or $150,000, including $50,000 of her own advertising dollars.


There was another drawback. While the neighboring county's WJR-AM radio has sports segments that help draw a larger, more diverse following, the only slot available was 2 a.m., she said. Ms. Shard describes herself as "passionate" about financial literacy and helping people learn the basics of money management, but who would be up listening to her at that hour?

She's now plowing all the money spent on radio into podcasts because that's where most of Shard Financial's clients are doing most of their listening anyway, according to Ms. Shard.

Ms. Shard likes that she can choose the length of her commercial-free podcasts, which may be just 15 minutes depending on her message, and that they can be delivered quickly compared with the days or possibly week that might go by between the taping and airing of her radio show. That made it hard to talk about current themes in the market.

"It's more timely," she said of podcasting. "Within an hour, it's formatted and pre-approved by compliance."


Staying on the right side of regulators is another difficult area for wannabe radio hosts to tread, particularly if you're not your own registered investment adviser. Shows are often "pre-taped" for that reason, according to Ms. Shard, who would provide LPL with an outline of her talking points to approve each week. Turning a live show with callers into a podcast with a "digital footprint" requires an additional approval by the Financial Industry Regulatory Authority Inc. that takes months, she said.

Regulators are taking a closer look at radio. The Securities and Exchange Commission in September issued an "investor alert" that warned of the potential for fraudulent schemes on investment-related radio programs.

"If a radio program promotes a particular stock or investment opportunity, listen carefully to what the program says about compensation it receives," the SEC said in the Sept. 23 statement. The agency cautioned investors to be suspicious if there is no disclosure, and skeptical when compensation for promoting a specific investment is vague.

If you're on a really good station, it totally makes sense to do that. If you get picked up and syndicated, then that's huge.— Margie  Shard,  EO and owner of Shard Financial Services Inc.

There are other ways to run into regulatory trouble. The alert followed charges of fraud the agency made that same month against Dawn Bennett, owner and CEO of Bennett Group Financial Services, alleging she grossly inflated the amount of her firm's assets under management and exaggerated investment returns obtained for customers on her paid radio program "Financial Myth Busting."

Ms. Bennett declined to comment through her attorney Daniel Nathan, a partner at Morvillo.

Mr. Freedman is mindful of regulation, saying he keeps his show centered on financial planning themes such as required distributions from 401(k) plans and makes only "very general statements" when talking about asset classes. He doesn't tell people what they should or shouldn't buy, and "I never talk about particular funds, what I like, what I don't like," he said.

Despite all the hurdles and pitfalls, radio can and does make sense for some advisers.

"Radio is sexy and fun," said Ms. Shard. "If you're on a really good station, it totally makes sense to do that. If you get picked up and syndicated, then that's huge."

But the odds of being a syndicated program aren't very high, she said, and podcasts are the "wave of the future."


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