It's Saturday morning, and sandwiched between segments about designer purses and custom jewelry on QVC, TD Ameritrade is making history, peddling the first wealth management product available on the cable network.
The pitch for the "Save Yourself Retirement Program" is made by none other than the financial-advice guru Suze Orman. For $36, viewers get access to Orman-hosted webinars, plus a TD Ameritrade tool to help select IRA options, 24 commission-free online equity trades through the company and a monthly newsletter from the exchange-traded-fund adviser Dorsey Wright & Associates.
Though QVC does not put a number on them, sales on Sept. 19 and 20 were brisk enough that the cable shopping network has ordered more segments for broadcast in January.
For executives at the Omaha online discount brokerage of TD Bank Financial Group, the effort is the height of modern marketing. But for others, selling investment products on a cable network associated with ShamWows and Snuggies could send the wrong message.
"Anybody who is concerned about image and the profile of their business might be reluctant to put themselves in the midst of people hawking makeup and custom jewelry," said Burton Greenwald, an analyst at Philadelphia's BJ Greenwald Associates. "This is just not a prestigious place for anyone in the wealth management business," he said. "It could be a very negative environment to promote your services."
TD Ameritrade disagrees.
The brokerage firm is confident this is an opportunity to generate "new customers and new assets," said Paula DeLaurentis, its managing director of strategic alliances. "There is this perception that the only person watching QVC is an old lady in the Midwest, but there are a range of women and men watching this channel," she said. "If we could buy ad space on QVC, we would, but we can't. We love this demographic and have found a unique way to reach them."
The QVC idea grew out of earlier project between TD Ameritrade and Orman.
The brokerage has been working with her since February 2007, when she began selling her book "Women in Money" on QVC. DeLaurentis said Orman, who has been selling products on QVC for 14 years, wanted a "unique offer" that could draw viewers to buy the book.
TD Ameritrade agreed to give anyone who bought the book $100 after they made 12 consecutive monthly deposits of $100 or more into a TD Ameritrade retirement account. More than 90,000 copies of the book have been sold on QVC.
The brokerage added "a significant number of accounts and a shockingly high number of automatic deposit accounts," DeLaurentis said.
"It was a calculated risk to offer a guaranteed amount of money at that time," she said. "This was a completely different way of marketing to women. There was definitely a risk, but everyone supported and believed in it. Since then, all of these women wanted to take the next step."
This year, TD Ameritrade and Orman began to assemble a package of products to make retirement planning easier. This led to the "Save Yourself" program and recent QVC segment.
"We think this is an innovative way to sell innovative products," DeLaurentis said. "The platform gives us enough time to educate consumers on the mechanics of investing and retirement planning. We hope it can continue to be an opportunity to spell everything out for them."
The product is not specifically designed for women, she said, but the book has given Orman a strong female following. "Suze has a way of really drawing women to her," she said. "She doesn't exclude men, but we know that this venue tends to attract more female viewers than male viewers."
"Women know retail," DeLaurentis said. "For $36 we are giving them $239 worth of trades and $420 worth of research."
The network claims that more than 190,000 people a day buy something on QVC, but it does not say how many are men or women or give their financial profiles.
Executives at QVC said Orman has a way of delivering strong sales. "When it comes to offering innovative, easy-to-use financial tools, Suze is in a league of her own," said Karen Fonner, vice president of strategic content for QVC. "Her new retirement planning program is just another example of her ability to deliver relevant products that truly resonate with our audience."
Analysts criticized TD Ameritrade's strategy, however.
"QVC is a place for impulse buying. No one goes there looking for a specific suede jacket," Greenwald said. "They buy what is being promoted. That is totally at odds with the careful, reasoned approach that has to come with financial planning."
Geoffrey Bobroff of Bobroff Consulting in East Greenwich, R.I., said it is "far-fetched" to think TD Ameritrade "can gain any real traction" with retail investors through QVC. "People are experimenting with a lot of different mediums right now," he said, and why not?" "But QVC is not necessarily reaching the upper-middle or middle market that wealth management companies want to be going after right now. I just don't see this as a core market that anyone wants to go after."
The concerns are larger than image issues, said Paul Werlin of Human Capital Resources in St. Petersburg, Fla. Many investment managers and insurance providers in Florida have used informercials for years to sell their products, he said, but a lot of risks emerge when it comes to selling directly to consumers. In January 2008, Florida's attorney general ordered Whitney Information Network Inc. to refund $1 million to investors because it had made "misleading" statements in a series of infomercials.
"I am not a TV junkie or anything, but I have not seen an infomercial selling anything financial in quite some time," Werlin said. "I think that might be a function of companies' cutting back on marketing, but I think it could also be a result of regulators' more closely monitoring these things."
DeLaurentis said selling products on QVC is not the same as doing so through an infomercial. "It is not easy to get on QVC," she said. "They are a high-quality outlet that puts the customer first. They have a huge quality assurance area, and they are committed to only selling top-of-the-line products. That hurdle lends validity to this product."
