Friday, December 24, 2010

'Enthralling' blogger unlinks herself from a 'Chain of Fools'

"You treated me mean: Oh, you treated me cruel!" Aretha Franklin
   (dec 24, 2012) My five-part, 25,000-word series on financial firm Edward Jones, which was originally published by the popular Motley Fool investment-media empire, disappeared from their site a few weeks after it was syndicated and warmly received late last summer. Various aggregator sites and message boards still provide links to my stories, but "page not found" is all you'll see if you click on any of them. 
    No, it's not because of threats from Edward Jones, I assure those who have emailed me about this strange demise. And it's not because my work was found to be biased or unreliable, although it's clear that many people are getting that impression. 
    It's because Fool editors felt rebuffed when I declined their offer to work with them on a repackaging project  that would give my "riveting and insightful" series "the broader visibility it deserves."
    They told me their team would work with my material and "reconfigure" it for an attention-grabbing comeback.
 That's not what happened. On December 6 -- about three months after my series was hustled off of the site -- Motley Fool syndicated a 5,000-word article (by three writers and two editors) about "the broker-dealer model," using Edward Jones as a case study. Thirteen paragraphs into the story, the authors acknowledged having "read" my series -- not on the Motley Fool site, but on my personal blog (

    Not only did they withhold the fact that my series originated on their site (a bizarre attempt to be punitive?); they also failed to give any positive characterization to it (colorful? provocative? unsettling?) -- in stark contrast to the effusive response it had received from high-level executives at the Motley Fool.  
    At the core of this mini-drama is the fragile flower known as the male ego. I think I may have bruised a few of them at the Fool -- not intentionally -- and they retaliated. It was a petty lashing-out that was unworthy of this fine group of gentlemen and of the organization itself, which is generally so cheerful and enlightened.
   When I initially submitted my work to the site, Fool blogger-network editor-in-chief Roger Friedman replied that he had been "enthralled by every word of it," even though each installment was much longer than stories the site generally accepts. He was so enthusiastic about the series, he told me, that he was going to handle it himself, rather than delegating it to a subordinate. 
    Roger later forwarded to me a note that another Fool executive emailed to his entire staff, in which he said that my Edward Jones package "is the kind of reporting we should all be striving to do." 
    Motley Fool special projects editor Brian Richards wrote: "It is clear how much passion and energy you put into it."

    I have been a big fan of Motley Fool founders Tom and Dave Gardner since 2001, when they launched their highly praised National Public Radio program. I have no interest in investing whatsoever, but the brothers were so charming, smart, earnest and decent that I listened every week just for the pleasure of their company. They were delightful!
The brothers have written 12 bestselling books.
    So I was particularly honored when Tom Gardner sent me a very cordial email about my Edward Jones package, writing: "Your research effort is inspiring, and the collection was extremely well written (so much so that I clicked to your blog and read through a number of your articles)."
    He asked how I would feel about having his staff work with my material, which had already been published via the Motley blogger network, so that it could be featured "on the mainpage or put out for publication elsewhere (or both)."
    I replied, "Do whatever you'd like with it."
    I told him I was making tentative plans to finance a Google ad campaign to promote the series, because I believed the material was pertinent to the thousands of Edward Jones employees and its millions of its trusting investors. I had earlier been assured  that the Fool pros would be determining "the best way to promote the series," but nothing ever materialized, so I was going to handle it myself.
     Mr. Gardner replied, "Let us Fools carry the financial burden of getting it out there."
    Instead of getting it out there, Motley Fool got it out OF there. 
    Why did they turn on me?
    Was it because they heard that I am a leftist, atheist, vegan jogger? Or because someone informed them that I think the stock market is a stupid, corrupt casino?
    My theory is that I hurt their feelings. Maybe my flippant emails seemed dismissive of them, rather than of their offer. Sorry about that. 
    But your response wasn't very professional, was it, you guys?
    Wasn't it a smidge immature?
    What kind of Fool do you think I am? 

"Surely you jest."  "Don't call me Shirley!"

    I committed the terrible sin of declining their request to help with the follow-up effort. Apparently for that reason, I was "disappeared," as inconvenient people have been known to do in Argentina. Maybe they thought I should be proclaiming my excitement and gratitude at the prospect of doing even more work (barf!) on the Edward Jones thing. I didn't do that. I had already done my job. I gave my blessing to them to do theirs, which was to fulfill Tom Gardner's vision.
     My demurral really shouldn't be pertinent in the grown-up world of serious journalism. The quality of the writing is what's important, not the likability of the writer. I guess I seemed ungracious to the Fool's  editors -- who are accustomed to dealing with "thousands" of writers who are thrilled to have a byline in a prestigious venue and will do whatever they are asked in order to maintain their tie to the Motley Fool. I had my first national magazine article published in Harper's in 1972, so seeing my name in print isn't something that makes me scream and call my mother. (Although I must admit that my mother was thrilled to have my name associated with the Motley Fool. She is a big fan of the Gardner brothers, and -- at the age of 94 -- she has decided she has a "knack" for playing the stock market.)
    I enjoyed being exposed to the Motley Fool's dynamic environment, but I felt no obligation to jump through any hoops for them. 
   When special projects editor Brian Richards solicited my involvement in a "small team" that was going to tackle the repackaging effort, I thanked him for the invitation but said I had been drenched in Edward Jones for months, during my research and writing, that I was through (totally through) with the subject, and that I had been thrilled and relieved to move on to several new projects. 
Edward Jones' image harkens back to the golden days of yesteryear.

    It was my impression from everything that everyone had said that my series would be a major part -- if not the centerpiece of -- the planned repackaging. No one said anything about dumping my work into the nearest black hole and replacing it with a little article by the Fool's staff writers about one aspect of the much larger Edward Jones saga. What did that accomplish?
    I had agreed that it would be reasonable to remove my series from circulation while the expanded project was being developed. There was no intimation whatsoever that my work was being killed. The clearly stated intent was to give it a new life and a wider audience.
    When the Fool article was finally published, I was shocked. 
     It  is a serviceable -- albeit sometimes naive and confused -- piece of reporting by some young adults who were probably born about 15 years after I began my journalistic career. They boldly advocate reform after discovering the obvious: A financial advisor who is highly incentivized to put his interests, and those of his employer, above the client, is unlikely to provide the best possible advice to the client. Who wouldn't agree with this elementary psychological insight?
    The very well-received article ignited a lively and contentious debate among financial professionals on the Fool site. Their comments proved that the issue is more complex than the Motley writers  -- and I -- are well-informed enough fully to understand.


   "We set out to explore one central, guiding question," the Fool article declares.
     I set out to explore dozens of questions, and I did explore them, with color and depth. A business-school professor described my approach as "literary nonfiction."
    "How did you manage to write a smart, funny page-turner about an outfit that sells mutual funds?" he asked.
     One of the dozens of emails I received from current and former EDJ financial advisors said, "I can't figure out how you could find out all this info without working there. I learned quite a few things from your articles and I was there for three (terrible) years."
     The Motley Fool article does not replace, subsume, exceed or incorporate anything from my series on Edward Jones. It certainly doesn't give my work the "broader visibility" that was promised. 


     The Motley Fool article begins with a foreboding clumsiness by saying, "Edward Jones stumbled over allegations that it didn't disclose important conflicts of interest." 
    Stumbled over allegations? Is this a newly minted legal expression or merely a lazy euphemism? When you are confronted by a federal law-enforcement agency with a massive pile of evidence against you, is that a stumble? It almost sounds cute.
    The wording is representative of the Fool team's tendency to tiptoe around the truth at times, and then muster the strength to utter staunch positions at others.

    The article is forceful in stating the obvious about the need for transparency between the seller of financial products and the buyer. It is negligent, however, in describing the widespread lack of transparency in Edward Jones' transactions. 

    I find this to be probably the writers' most gullible statement: "Edward Jones discloses possible conflicts of interest on its website -- and presumably its financial advisors disclose them over the kitchen tables of their customers."
    "Possible" conflicts? The conflicts are blatantly clear.
    Presumably? How can you be so presumptuous?
Take care of it, sir. It's everything we've got.
    The experience of my parents (and later, me) and at least hundreds of complaints from Edward Jones clients online (of which the Motley writers were aware) makes their "presumably" totally disingenuous, not to mention flaccid. I'm sure this wording gave many current and former Edward Jones financial advisors a good laugh. Several of them have openly ridiculed the notion that they read the disclosures to their clients, as my series documented.

    The reference to disclosures on the Edward Jones website is also misleading. There were no disclosures until the multimillion-dollar SEC settlement against Edward Jones, and the stunningly effective class-action lawsuits that followed. Even after that, Edward Jones made it hard to find the disclosures on its site (or impossible, many former clients have said). As an experienced investigative reporter, I agree with their characterization. The disclosures were buried, just as several expert witnesses in the SEC case predicted they would be.
    The upgraded and readily accessed disclosures about conflicts of interest that you can view today just happened to go online as my series, which was much-dreaded by Edward Jones, began. 
    More to the point, is it realistic to assume that the average investor feels obliged to go online and probe the boilerplate documents of an established, top-tier investment firm before doing business with it? Edward Jones stresses the face-to-face client/advisor relationship, which makes such a background check even less likely. Your affiliation is with a trusted person, not an institution. 
     Many of EDJ's clients are obviously elderly people who are not computer savvy. I use my computer for several hours a day, but when I learned that my parents had entrusted all of their money to Edward Jones, it didn't even occur to me to prowl through the firm's web site to assure myself that they were in good hands. When their savings were with T. Rowe Price, Vanguard and Schwab, I never felt the need to scrutinize the web sites of those firms either. 


   The Fool article continues its born-yesterday approach when it adds: "To its credit, Edward Jones does a very good job in disclosing how its financial advisors are paid."
    Once again, my response is, "What???" 

    As proof, they cite a web document that did not exist until my series was under way. I had done web searches for "Edward Jones fees" many times during my information-gathering. Nothing was there except for a pdf. document about how much the firm charges to administer trust accounts, and it  actually provides some specific charges ($1,200 annually just for starters).  There was nothing whatsoever for the general investor.
    And even though the recently posted Edward Jones document about investor fees lists the tasks that its advisors get paid to handle, it doesn’t say how much they are paid. It gives the investor no information about the sums that will be withdrawn from his account each time his advisor does any number of things. It seems odd that the Motley Fool team would characterize this as doing "a very good job." The advisor is paid for buying a stock or bond or mutual fund for you -- that's to be expected. But is his fee $12.95 or $1,295? (It's not $12.95.) Edward Jones provides no numbers.
    The Motley writers do obliquely and meekly pose a teensy question about Edward Jones' exorbitant fees: "It's true, of course, that financial advice isn't free. Should it cost this much, however?"
    Well, should it? However? And is it even advice? Edward Jones advisors are selling what they're told to sell, obviously putting their own interests and those of Edward Jones ahead of the customer. This is not an opinion; it has repeatedly been documented by legal and financial experts who are far better equipped than I to make such a sweeping judgement. The advisors have been griping about it online ever since message boards were invented.


     The Motley Fool article evades the issue of Edward Jones' deception in a way that is disrespectful to all those people who discovered too late how much was being taken from their accounts without their knowledge or consent. Most people never do discover it. The monthly statements they receive from Edward Jones make no reference whatsoever to fees and commissions. You can lose thousands of dollars over a period of years and never know a thing about it.
The advisor is compelled to betray his client.
      Without adding anything new, the Motley reporters' narrow focus on conflicts of interest simply rehashes a conundrum that has been a topic of wide discussion in the investment world for many years. The writers complicate things unnecessarily right off the bat by characterizing Edward Jones sales representatives as "broker-dealers" -- whom they say do not have fiduciary responsibility -- as opposed to "investment advisors," who do have a solemn duty to put their clients' interests first.
    The Motley writers muddle this up and get it all flipped around by forgetting that Edward Jones always uses the title of financial advisor, not broker-dealer -- a fact that totally screws up the writers' effort to present a comprehensible overview of this issue. 
    In fact, several of the financial advisors have written that Edward Jones "runs away from" the title of broker, because it would imply fiduciary responsibility. The reader is required to juggle the various titles and obligations as he wades through the article because the writers paid inadequate attention to the real-world usage and connotations of these titles. 

    My Edward Jones package of stories continues to generate an ever-greater number of hits every day, after all these months on my blog. This is what "going viral" is all about: tens, then hundreds, then thousands of hits a week. With the exception of my scathing but somehow lighthearted three-part series on "The Dr. Oz Show," the Edward Jones package has generated a greater email response than anything I've ever written.
    My work was intended to be understandable and enjoyable to a general audience (the "Mom and Pop investor" targeted by Edward Jones). The Fool's article honed in primarily on issues tailored to a specialized readership, which is reflected in the comments section. My work is not incompatible with theirs, but if it were, it could have been left where it was: in the blogger section, where it could still be accessed by interested readers. 
    If the Fool no longer wanted to have a relationship with me -- since I am such an impertinent, wisecracking dame -- they could have directed readers to my blog, rather than having me vanish into Neverland without explanation.
    Grow up!
    The Fool's article on "the broker-dealer model" comes to an underwhelming, obvious conclusion, which is the same as their beginning premise -- and the writers put it in boldface, to make sure you get it:

   "Investors are at greater risk of being taken advantage of when their advisor is not required to put them first, has strong economic incentives to generate fees, and doesn't need to disclose those conflicts of interest in a particularly clear way."
    I wonder what "particularly" means, in this context.
    I guess it's not particularly important, to a woman scorned. Or to a reader with any brains! The sentence is as self-evident as a sentence can be.

    By pulling a sort of Orwellian trick with my series -- trying to make it seem as if it never existed -- the Motley Fool allowed editors' pouty feelings to influence its journalistic integrity, as well as its commitment to transparency, civility and good-natured "foolishness."  This disappoints me. I think they are better than that. 
Repeat after me: "The Edward Jones series never existed."
     Nothing I said or did justifies deleting my articles, leaving interested readers with no explanation but "page not found." It makes me seem suspect. It makes Motley Fool seem unprofessional.
    In the past 20 years, charismatic brothers Tom and Dave Gardner have harnessed their delightful sensibility, energy and expertise to build a "multimedia financial-services company dedicated to building the world's greatest investment community."   
    The atmosphere of serious fun and collegiality they've created is something I've admired for years, and I was honored to be affiliated with them for a few months.
     But they allowed their underlings to throw a mini-tantrum, and exact a satisfying bit of revenge, just because they felt rejected. 
    I refused to be a team player. 
    I'm not on their team, that's why.  I am my own team.
    That isn't condescension or arrogance. It's one of the perks of being older: I don't need Motley Fool, or anyone else, to help me do what I want to do.
    They guys at the Fool are decent, enjoyable people (especially Roger, who is really a joy), and I regret that my smart-assed, quasi-crazy and staunch independence offended them. 
    But when thought they were punishing me, they are the ones who lost out. 

What kind of fool do you think I am?
 I ain't falling for you over again
I ain't playing a game that I know I can't win
What kind of fool do you think I am?
                                       Lee Roy Parnell