5 Conversations on the FTC, trader education, and building a financial publishing business in this new regulatory evironment

The FTC is focusing more than every before on trader education businesses and investment newsletters publishers.

Here at FMS we’ve been having conversations across the industry about these issues in order to make sure you’re up to date on the risks.

If you own a business in the industry then these 6 items are must know for you.

1.  Conversation with Damon Wright, a lawyer with a large client base of financial publishers and trader educators, from the firm Gordon Rees. Damon and I discuss the recent FTC actions and communications regarding promotional earnings claims, track records, and more.

2.  Conservation with Aaron Dehoog, one of the top investment newsletter publishers in the industry. He shares how he’s adjusting his promotional copy and why he believes these FTC actions ill ultimately be good for the industry and the customer base.

3. Conversation with Bret Holmes, on how to build your business in this new environment. We cover a broad range of operational and marketing issues and discuss promotional trends.

4. Damon Wright’s FMS presentation on legal issues in financial publishing. A must watch for any trader educator or financial publisher.

5. The Gordon & Rees E-Commerce Retailer Guide, with a section specifically on financial publishing issues.

6. A conversation with Dr. Martin Weiss, a 50-year veteran of the investor education and publishing industry. We discuss some of the regulatory history in the space. Plus, his views on the FTC making it’s presence known in the industry, essentially for the first time.

Video #1:  Update on FTC’s action regarding earnings claims in financial publishing, trader education, and other industries.

The FTC just posted a list of 1,100 business they put on notice they:

“could incur significant civil penalties—up to $43,792 per violation—if they or their representatives make claims about money-making opportunities that run counter to prior FTC administrative cases.”

And quite a few companies in our industry are on the list.

Up to $43k per misleading copy claim could turn a single promo into a devastating loss for a small, unprepared company.

You can read the FTC notice here.

And you can see the full list of companies receiving the notice here.

Damon Wright, a lawyer with specializing in FTC issues from Gordon & Rees, a law firm with a lot of financial publishing experience.

When I saw the notice, I emailed Damon Wright, a lawyer with specializing in FTC issues from Gordon & Rees, a law firm with a lot of financial publishing experience.

He and I recorded this conversation about what this FTC notice means for trader educators and financial publishers.

Regulatory risk is a catastrophic risk.

Once again promos are coming down.

Traffic is stopping.

Just like the scare last year the FTC vs. Raging Bull – and particularly the aggressive use of their injunction powers – did what they hoped.

It terrified many publishers to stop all promotion until they did a full legal review. That’s kind of industry-wide behavioral change is part of why the FTC brings cases.

Expect more actions.

One thing Damon and I discuss is how the FTC’s recent supreme court loss removed their traditional enforcement strategy.

Now they’re building a new framework and that opens up the possibility they will target smaller businesses next as they build up legal  precedent in their new framework.

This kind of thing brings catastrophic risk to your business.

Listen to our conversation. Talk to your lawyers.

This is the time to make certain you’re business is operating in the regulatory environment we’re in – not the one you wish you were in.

Video #2: Aaron Dehoog. “This is good for the industry.”

he FTC crackdown is good for the industry.

Full Stop.

That’s Aaron Dehoog’s view and when Aaron talks publishing I listen.

He’s one of the best in the business. I say it all the time.

He scaled Newsmax from a few thousand subs to over 400k paid subscribers in just a couple of years time.

Then he took over an Agora business that was in the red, turned it around, and scaled that north of 100 m USD in what seemed like no-time flat.

Plus, he’s an amazing copywriter himself.

And he thinks this is 1. Good for the industry 2. That a lot of the FTC copy issues are caused by lazy copywriting and marketing.

As you can imagine, lately I’ve been having a ton of conversations with people about the FTC, promotion, and copy. So, I sent Aaron and a bunch of other top publishers this email:

“Would you be up for doing a recorded interview to talk about copy & promotion in light of the recent FTC stuff? 

“I’m thinking of doing a little series around the idea of ‘Copy Crisis’?”

“I had a conversation with a publisher last week who shrunk from 20m to something like 10m yoy largely because they pulled all their promo and redid it to be more compliant and it didn’t convert. 

“He’s looking to get out of the industry because he thinks the FTC is killing his ability to promote. I think he’s overreacting but it is worth talking about. 

“I’d love to get your perspective on copy & promotion in this new environment if you’re willing to share. I’d send the interview out to the FMS list.”

ALMOST EVERYONE SAID NO.

“John, I’ll do an interview about ANYTHING ELSE EXCEPTFTC & copy issues.” was pretty much the response I got from everyone.

People are scared.

Scared anything they say on record could end up being found as part of the discovery process if they ever have an FTC case

Only Aaron and Bret Holmes said “Yes“. (I’ll post my conversation with Bret on this topic soon).

Aaron sent me a huge outline of topics he’d like to touch on.

“Are you sure you want to do this,” I asked because now I was nervous about doing this since so many people were scared to talk on record about it.

The last thing I ever want to do is add business risk to someone in our community.

“Maybe check with your legal team first?“

He did.

They gave him the go ahead.

He put an entire presentation together. We talked. We recorded it.

Here it is for you to watch.

On thing I love about Aaron is he actually cares deeply about his customer (crazy, right?).

I believe it’s too easy for direct response marketers to lose sight of what’s best for their customers, especially when they get myopic on short term conversion statistics.

Every time I talk to Aaron about publishing his entire world view on the business is framed in terms of what’s good for his readers and customers.

He cares about quality editors, quality products, quality ideas.

In this conversation Aaron explains why he believes the recent FTC crackdown on over-aggressive promotion, specifically earnings claim issues, lifestyle marketing, and being clear about the typicality of results used in your copy are all GOOD for the industry.

Plus, he shares how he’s focusing his promotional efforts. What he sees needs to change in copy – and gives specific examples of how you need to think through copy elements.

If you’re scared of the regulatory environment then I think this is a must-watch conversation.

Video 2A: Update on the interview format for promotions.

After our conversation Aaron remembered why he had the one slide he spaced on in our recording and sent me this follow on point. It’s important so check it out:

https://youtu.be/JjH-BeOiGKA

Video 3: How do you win as a trader educator or financial publisher in this new environment?

Bret Holmes was employee #3 at Money Map Press and was critical to it’s success going from $0 to over $225 million a year in subscription revenues.

Since leave he was involved in helping the scale several of the fastest growing trader education companies and investment newsletter publishers. Including one who had a major FTC action against them.

He’s also one of the great operational thinkers in the industry. Our conversation covers a broad swath of issues across financial publishing including:

Video 4: FMS Presentation: Legal Issues in Financial Publishing by Damon Wright

You should also download the Gordon & Rees E-Commerce Retailer Guide.

There is a lot of very practical, very useful insight and advice in this guide.

One thing I like about Damon is that he will actually work with & train your marketing and copywriting team to understand how to promote.

He’s also understand you still need to convert or there is no business to protect.

So, he’s able to help you think through the best way to handle your existing promotional assets like testimonials.

I’m happy to make an introduction to anyone in the industry who needs it.

You can also reach out to Damon directly on LinkedIn.

If you need a legal team with experience in financial publishing, trader education, and internet marketing then connect with Damon on Linkedin.

Video 5: 50-year veteran of financial publishing, Dr. Martin Weiss, explains regulatory history of the industry. And why we’re in a new regulatory environment.

Martin is one of the greatest advocates for both individual retail investor & the financial publishing industry for the 50-years his been in business.

Weiss Ratings today is the only purely independent ratings agency in existence. The US Government Accountability Office reported that the Weiss insurance company ratings outperformed those of his closest competitors by a factor of three-to-one.

It’s no wonder Forbes called him “Mr. Independence.”

In this video, I speak with Martin about some of the changes he is seeing in the financial publishing industry.

If you’re in the financial publishing industry I highly recommend you listen to our conversation, recorded as a bonus session to FMS 2021.

Finally, if you want to stay on top of trends, risks, and opportunities in the industry join us at The Financial Marketing Summit, the #1 industry conference.

You’ll meet hundreds of founders and executives from across the financial publishing ecosystem.

The hottest traffic sources, media agencies, super affiliates, copywriters, legal teams and more.

Best,
John Newtson