How do you Rate Investing Advice from Investing Publicity?

Financial services companies publish press releases at a prodigious rate. Many of these releases are required by law to inform corporate investors and prospective investors of the business facts or to announce new products and services to the public. Lawfully-driven press articles are usually very bland, very boring. They are loaded with disclaimers and make no promises.

Promotional press releases, however, are very different in nature. They tout the goals behind the programs, selling dreams (that have a fair chance of realization). But the question of reliability should occur to everyone who reads these press releases. How reliable is the information you’re being given?

It is, of course, factually correct — no financial services company wants to be caught intentionally misleading the public. And so the services offered are described in acute detail, but not in the press releases. For full disclosure you are directed to an appropriate Website or telephone number so that you may request all the paperwork that is carefully written to comply with laws demanding full disclosure and evaluation.

So when you see that Zurich Private Capital is sharing principles of investment or that Canada Life has seen improvement in annuity income it sounds like they are providing you with actionable investing tips, does it not?

This is all part of the marketing business. Financial services are extremely competitive and one must understand that companies will position their best performing products or consumer messages in the best possible light. The Zurich release is a “consumer message”, a selling point to persuade consumers to trust the financial expertise of the company. The Canada Life release is “product message”, featuring data relating to one of its better performing products (within a certain time frame).

There is really not enough information in these releases for one to make an informed investment decision. You should treat these kinds of press releases in much the same way you would treat something like an announcement from Focus Capital Partners about a new fund that specializes in Emerging Markets. In other words, from the individual investor’s point of view, all of these announcements are Good Things to nibble upon but we are fish and these companies are the fishermen.

We want to be caught and reeled in but only by the best possible match. Perhaps I could have found a better metaphor but I look at financial services press releases — when used for marketing — as flashes of light that are designed to intrigue people in a certain state of mind. If I am looking at emerging markets investments then I’m less likely to think about annuities (although an annuity could be backed by emerging market investments). The lure is targeted toward your state of mind.

The wise investor always seeks more information. We should accept the aid that financial services providers offer us through their marketing lures but remember that you may be able to find what you are looking for through other channels, too.