Has Suze Inc. Gone Too Far? Critics say the financial advisor's new insurance venture blurs her role.
(FORTUNE Small Business) – New age financial guru Suze Orman turned her name into a powerful brand by dishing out objective money-management advice in six bestselling books, a show on CNBC, and a column in Oprah's magazine. In doing so, the plainspoken waitress-turned-stockbroker-turned-media-icon has built an empire that, she says, generates $40 million a year. But now Orman's newest product, Suze's Choice long-term-care insurance, raises a host of ethical and business quandaries.
Orman has recommended for years that people buy long-term-care insurance to protect themselves from catastrophic medical costs. As of press time, she planned to start selling her own version on April 27, developed with GE Financial, on QVC and on her website. Given that Orman will get a commission on each plan she sells, some observers doubt she'll be able to retain her aura of objectivity. "It's a potential hornets' nest," says Joel Kaplan, chair of the newspaper department of the S.I. Newhouse School of Public Communications at Syracuse University.
"This is why people don't trust the media," adds Orville Schell, dean of the graduate school of journalism at the University of California at Berkeley. "Because they're not sure whether there's an ulterior motive."
Orman says that she'll mention Suze's Choice only on shopping channel QVC and on her website. "When I'm on CNBC, I don't talk about it," she says.
But by trying not to mention her long-term-care insurance, Orman could compromise the quality of her advice on CNBC, says Syracuse University's Kaplan. "If someone calls in and says, 'I'm 62 years old, I have a history of Alzheimer's in my family, and I'm thinking about buying one of these long-term-care policies--what do you think, Suze?' what's the perfect answer?" asks Kaplan. "Is she going to recuse herself from questions like that? Then what good is she in the position she's in?"
Orman will continue to answer such questions by referring viewers to other providers, says a spokeswoman: "The only place people really buy Suze's Choice is QVC." So most of the time Orman will be telling viewers to purchase her competitors' products. Which raises another question, Who's giving Suze Orman her business advice?