A once-perfect radio marriage ends in divorce

While my business partner and I recently celebrated our radio program’s 25^th anniversary, it’s likely we won’t be broadcasting much longer.

Frankly, the neighborhood has become crowded and sketchy.

In just about every major media market, there are several, if not dozens, of financial talk shows on the dial. The station where we began broadcasting our show back in 1995, a once-renowned launching pad for several major media careers, now has six weekend financial topic programs.

There are good economic reasons why there are so many financial topic radio programs today: They generate revenue for the stations and pull in new clients for the firms that sponsor them.

Backing up a bit, for decades, talk radio generated nearly all its revenue Monday through Friday, and weekends were essentially throwaways. Without commuters sitting in their cars listening, weekend ad revenues were minuscule. Stations ran reruns.

But things have dramatically changed over the past couple of decades.

The radio industry, often financed with a heavy debt burden, went through a massive rollup at the turn of the century. At the same time, competing media, like the internet and satellite radio, entered the market and gave listeners other options for news and entertainment. This one-two punch pushed big radio companies, such as iHeartMedia, into bankruptcy.

To shore up financing, the radio industry began selling the weekend timeslots, rather than paying for programs. Not merely selling ad slots, mind you, but nearly their entire weekend lineups. Because of the economic pressures, station managers paid too little attention to the content or quality of the shows, and instead just sold to the highest bidder.

What you have today is weekend radio filled with mortgage brokers, solar panel companies, day trading companies and myriad financial shows.

Some of the shows are good, but others are downright fraudulent.

The challenge is that most listeners can’t tell the good from bad. Until the SEC filed suit against a radio host this past year, one “financial adviser” had for years touted his services as “fiduciary, fee-based financial advice.” But what he was accused of selling his often-elderly clients were indexed annuities with 15-year surrender charges.

Another adviser finally dropped his show after numerous lawsuits were filed against him. He touted “uncommon investments” that weren’t correlated with the stock market. But the disclosures on his IAPD record suggest he was simply loading up clients with nontraded REITS and BDCs, and people got hurt. 

The result is that the radio industry has lost credibility. What used to be a trusted source for news and information has become a carnival barkers’ row where any advertiser can slap together an hour-long show and pay to get on the air.

In addition to the degradation of the programming, there are other factors, such as streaming and podcasts now competing against traditional radio. In addition to all that, the coronavirus has slashed the amount of time people spend in their cars.

In 2015, we began offering the weekly radio show in podcast format as well. Today, not only do we have more podcast listeners for our weekly show than terrestrial radio show listeners, there’s unlimited room for growth, and we aren’t bracketed by shows dispensing predatory advice.

My belief is that radio stations will go down with the “highest bidder” ship they launched, leaving their remaining listeners at the mercy of unfit captains as people with shows like ours cease broadcasting altogether. 

[More: How to profitably serve mass affluent clients]

Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $8 billion in AUM.