Journalist As Advisor p.12

By: Tony Case Newspeople are expected to remain emotionally detached, but
readers tend to cast personal finance writers as money managers sp.

THOSE WHO WRITE about personal finance are faced with a curious dilemma: As journalists, they're supposed to remain objective, emotionally detached from their subjects and their readers.
Yet, the unique, advisory nature of this beat too often puts these reporters in the decidedly intimate role of money manager.
"While we can educate people to a degree, no other section of the newspaper is asked to make decisions for people ? nor should we," Jodi Schneider, local business editor of the Washington Post, told fellow Society of American Business Editors and Writers members meeting last month in Boston.
"We're a newspaper. We print information. We put the news out there and hope readers can use it to make decisions about their lives."
Personal finance reporters at newspapers have a challenge that alludes their colleagues at consumer magazines and newsletters, Schneider observed. Unlike other periodicals, daily newspapers aren't specialized in their coverage, so financial writers find themselves competing with hard news and gossip columns for the consumer's attention.
Newspapers have long used financial advisors to explain the markets and to offer investing tips in bylined columns. But to avoid journalistic conflicts, editors increasingly are insisting that only professional reporters write about personal finance. The Boston Globe, for instance, now employs only newspeople on its financial pages. SABEW discourages the use of nonjournalists, as well.
Fortune contributing writer Joseph Nocera, whose work has appeared in the Wall Street Journal, New York Times and elsewhere, doesn't agree with such restrictions.
Why is it permissible, he asked, for a journalist to quote a trader as recommending a particular stock in a news story, when it's verboten for an investment expert to offer guidance in his own piece?
Ted Miller, editor of Kiplinger's Personal Finance, pointed out that there's a world of difference between a reporter quoting an analyst in a news article and a money manager sharing his wisdom in an opinion column. The journalist owes his to the reader, Miller explained, whereas the financial planner's loyalty lies with the investor.
"That's not just written in a code of ethics somewhere ? that is his fiduciary responsibility," he said.
Because newspeople are presumed to be disinterested, Miller held, readers might assume that a fund manager ? whose advice is indisputably biased ? is also disinterested.
Nocera argued that the notion of a dispassionate personal finance journalist simply doesn't fly.
"You don't want somebody who's disinterested telling you what to do with your money ? you want them to be interested," Nocera told SABEW members.
"Objective journalism doesn't work in personal finance journalism."
To avoid potential conflicts, newspapers such as the Washington Post require their business staffers to disclose the investments they have, allowing editors to determine whether there's impropriety before making assignments.
Nocera noted this policy differs from that which is applied to the money manager, who's encouraged to own a stake in the investments he recommends.
"I'm not saying that as a journalist, you should go out and buy all the stock you recommend," he said. "But there's something to be said for listening to advice from people who have money at stake."
Nocera related that Norman Pearlstine, now Time Warner's editor in chief, claimed not to have invested in the stock market during his editorship of the Wall Street Journal. Nocera called this "nuts."
"The experience of owning stock helps form the way you write about it and makes you more empathetic toward your readership," he maintained.
"On the one hand, yes, worry about the person covering Mobil having Mobil stock. But it seems to me that people covering personal finance should not be so lily-pure that they're not in the market, that they can't be in the market because its wrong somehow. To me, it's wrong to be out of the market."
"You don't want somebody who's disinterested telling you what to do with your money ? you want them to be interested," Nocera told SABEW members. "Objective journalism doesn't work in personal finance journalism."