Can Fidelity’s New Financial Journal Play It Straight?
Fidelity Investments knows a thing or two about personal finance.
Boston-based Fidelity is the nation’s largest mutual fund company, managing $160 billion, and runs the second-biggest discount brokerage.
Now Fidelity is getting into the magazine business. Much to the chagrin of some journalists and advertisers, Fidelity today is launching Worth magazine, a bimonthly personal finance journal.
The controversy centers on whether Fidelity’s Capital Publishing Co. can objectively publish an upscale version of Money magazine without either over-promoting its own products or ignoring them altogether to prove its editorial independence to naysayers.
The first issue includes a bland reference to a Fidelity product in an article about stock index funds; if Fidelity is identified as the magazine’s publisher, it isn’t readily apparent.
What the future holds is anyone’s guess.
“Worth is likely to be, if anything, anti-Fidelity and anti-fund to overcome the suspicion that it’s the handmaiden of Fidelity,” said Michael Lipper, president of Lipper Analytical Services, a mutual fund ranking service.
Some fear just the reverse--a Fidelity flag-waving rag.
“Magazines and newspapers usually critique the performance of the money managers,” said Dan Sullivan, editor of the Seal Beach-based newsletter the Chartist. The relationship between Worth and Fidelity “would be like if the Los Angeles Rams were to buy The (Los Angeles) Times, and they could tell everyone what a great team they have.”
Worth Chief Executive W. Randall Jones--a former publisher of Esquire--insists that a wall has been built between Fidelity and Capital Publishing to ensure fair and even coverage.
“All you have to do is read an issue of the magazine, and that’s convincing enough,” Jones said. “I didn’t leave the publisher’s office at Esquire magazine to come over and publish a house organ.”
Some say the pre-publication controversy surrounding Worth is unfair, singling it out for special attention when other publications have equal or even greater potential conflicts of interest.
Time-Warner, for instance, publishes Entertainment Weekly and owns Warner Bros. studios. Financial World, a New York-based investment journal, is owned in part by Cincinnati financier Carl Lindner.
“In an ideal sense, it would be nice to say a publication ought not to have any other financial interests other than news, but in the real world that doesn’t happen very often,” said Dean Rotbart, editor of Business News Reporter, a newsletter covering financial journalism.
So, Rotbart said, Worth will have to succeed where so many others have failed: in writing about itself.
“The worst place you can turn to find out what’s going on at Dow Jones is the Wall Street Journal,” said Rotbart, a former Journal reporter. “When (journalists) have to cover their own organization, it is an awkward gymnastics event that is conducted under the watchful eye of corporate executives--and that happens at the best news organizations in the country.”
Worth is the product of a merger between Investment Vision--a Fidelity publication mailed free to the company’s 865,000 customers--and Personal Investor, an Irvine-based personal finance magazine that Fidelity acquired in December.
Fidelity is spending more than $10 million to launch Worth in the midst of the worst advertising slump since the Depression. Though the first issue is 180 pages long, Jones acknowledges that some financial service companies would rather spend ad dollars elsewhere.
“There are advertisers in the financial arena who say they don’t want to put any money in their biggest competitor’s pocket,” he allowed.
However, some of Fidelity’s biggest rivals--including Dreyfus, T. Rowe Price, Vanguard, Scudder, Janus, Stein Roe and Strong--are doing just that, at least initially. The reason is simple: Worth is the most expedient way to reach Fidelity customers.
“Here was a rather unusual circumstance; a competitor in effect gave you access to their investors through their publication,” explained Steven Norwitz, vice president of T. Rowe Price in Baltimore. “We were inclined to take advantage of it.”
Worth’s launch is part of a sudden media-wide fascination with personal finance.
Dow Jones and Hearst have teamed up to publish SmartMoney, another Money-like magazine that will begin a trial run in March. Four issues will be published before the two companies decide whether to make a permanent commitment.
Worth hopes to succeed by aiming at an upscale audience--”leading-edge baby boomers”--and giving readers offbeat articles they haven’t seen in more traditional personal finance magazines.
The typical Worth article, according to Jones, would be something like a tongue-in-cheek look at how to talk to your parents about your inheritance or an explanation of how to buy into a sports team.
“You won’t see “10 Ways to Invest $1,000,” said Jones, referring to one of Money’s most popular covers.
Fidelity’s Newest Challenge
By launching Worth, its new personal finance magazine, Fidelity Investments is taking on two challenges: writing about itself and contesting for readers with some well-established publications. Fidelity says Worth’s initial circulation will be 200,000.
Leading Personal Finance Publications
(Circulation as of June 30)
Money: 1,855,426
Kiplinger’s Personal Finance: 1,116,437
Barron’s National Business and Financial Weekly: 235,536
Source: Audit Bureau of Circulation/Magazine Publishers Assn.
