Would You Buy A Used Car From This Man?
Today’s title is generally attributed to Mort Sahl, America’s first widely televised stand-up comedian. He was well known for his commentaries on the times but before he became famous, he did, in fact, wash and sell cars for a living. The phrase came to mind recently when I saw actor Tom Selleck promoting reverse mortgages on TV. He’s an award-winning performer so I shouldn’t have been surprised by his apparent sincerity. As I watched him, I almost believed that he actually was an expert on the product, not an actor simply reading a script.
Our firm has been researching reverse mortgages for much longer than Tom has been selling them but, of course, we don’t sell anything to our clients. Instead we propose solutions, based on our understanding of their particular needs. We’ve published a new report about reverse mortgages on our website but it doesn’t mention any specific product. Instead, it goes into some detail about their most common uses: eliminating current mortgage payments, avoiding withdrawals from investment accounts when prices have fallen and financing long term care costs. It also identifies four additional situations when a RM might be appropriate. We’d be glad to delve further into the topic with you to see if one might make sense.
Another celebrity pitchman I’ve noticed is retired pro football quarterback Joe Namath. Joe is currently excited about Medicare insurance plans. According to him, the plan he’s selling offers a wide range of services, all included ‘at no additional cost’. Something he doesn’t mention is that calling the toll-free number will put you in touch with an agent who sells one specific Medicare Advantage (Part C) plan. It will not be compared with other Part C plans to see which might offer the most advantages in your situation and it will not be compared with Medicare Supplement part F, G, K, L, M and N plans.
Medicare is a topic on which we stay current since it’s the way many of our clients receive their health insurance coverage. In most cases, we find that one of those supplemental plans is a better fit than Joe’s Part C recommendation. While Part C plans are usually quite broad, they are not deep. They cover a wide range of services but their limits are (typically) 80% of the cost of significant medical or surgical problems. This could leave a client with an unexpected (and potentially significant) out of pocket expense, an unpleasant surprise we prefer to help our clients avoid.
Ads featuring celebrities have a long and colorful history in our country. Among the first were Mark Twain with his own line of pens and Ty Cobb with his personal brand of tobacco, both dating from the early 1900’s. Tom Selleck has recommended Safeguard soap, Dubonnet liquor (alongside Farrah Fawcett), Ban Basic deodorant and Close-up toothpaste in addition to mortgages. Broadway Joe pitched Olivetti typewriters, Noxzema skin cream (also alongside Farrah Fawcett) and Brut body spray. And, I’ll bet no one who watched the 1973 Super Bowl will ever forget his ad for Beauty Mist Pantyhose. How likely is it that either has special insights into a highly complex financial product? In case you’re interested, my favorite celebrity TV ad was by Michael J. Fox for Diet Pepsi although the one Betty White did for Snickers runs a close second.
The creation of the Internet opened up a whole new medium for celebrity endorsements so, clearly, this kind of advertising not going away. If its influence only extended to cosmetics and running shoes, the results might be considered fairly harmless. However, the stakes are considerably higher when it comes to personal finance. At WWA, we advise our clients on a wide range of complicated issues. Because we don’t sell any type of financial product we carefully vet companies that do. Using that information, we provide personalized recommendations to each client, enabling them to make good decisions and minimize risk. Whether we use in-house expertise or an outside specialist, advising is at the heart of our ‘fee only’ planning process. Making personal financial decisions a bit easier for our clients is what keeps Jalene, Andy, Peggy and me coming back to work every day.