Advertising: how businesses spread the word about the products and services they offer in the hopes of gaining customers.  It ranges from cheap word-of-mouth referrals to massive, expensive , mass-media campaigns on TV, radio, the Internet, and more.  For factoring companies, this isn’t as simple as Burger King showing us a juicy new burger from various angles.  It’s a matter of stimulating the need for cash. NOW.

We see it in the most popular advertising online: the brilliantly jingled 877-CASH NOW commercials that ran on TV and radio, featuring opera.  It was catchy, pertinent, and funny to the point of absurd; in other words, you remembered it.  For all factoring needs, JG Wentworth would burst through your skull with dramatic, operatic flair.  For structure brokers, this has been an oft-noted irritant post-structure.  Those brokers willing to provide referrals regarding which factoring companies they’d recommend for quotes are simply thrown out the window in favor of the direct-to-consumer advertising campaigns of Wentworth and other giants; mostly because the brokers themselves aren’t being contacted anymore for their input.  Is this fair?  For big factoring companies, certainly; they have the capital to advertise, so why not take advantage of it?  But what are the downsides for brokers and annuitants?  These are two-fold:

1.)    Advertising is expensive.  But more than this, keeping staff on hand to handle the influx of inquiries as a result of such expensive advertising is also expensive.  This cost cannot be easily absorbed by the corporation and must naturally flow to the consumer; in the case of factoring companies – the annuitants.  This results in annuitants getting lower rates of return on their factoring transactions.

2.)    It cuts out structure brokers.  By appealing directly to potential customers, advertising by Wentworth and other companies has severely impacted the professional and referral importance of structured settlement brokers.  Annuitants no longer have a need to contact their brokers or attorneys, in many cases, since they already know who to call if they’re in need (or tempted by) cash now advertising.  This distances annuitants from those who know best if factoring a transaction is wise or necessary: the brokers themselves.

So, what can be done to address these issues?

1.)    Know who doesn’t conduct mass advertising directly to annuitants.  Those who aren’t playing the expensive advertising game aren’t going to pass on costly inflated rates which ultimately short-change the annuitants.  Annuitants who decide to factor their structures are going to do so if their minds are made up – wouldn’t it be better for them to get the best rates possible?  Annuitants just need to be given the opportunity to speak with someone who knows where to turn beyond what they may see on TV.  They should be speaking to their brokers again; and these brokers should be referring to smaller, specialty factoring companies.

2.)    Direct-to-consumer advertising is a fact of life in every business, but this shouldn’t necessarily be one of them.  Brokers know the ins and outs of this business far better than annuitants, especially given that it was the broker who put together the structure to begin with.  Wouldn’t it be nice to be involved in the process of potentially taking them apart?  It may not even be the best thing for an annuitant to do!  Brokers input is important.  Stay involved beyond the structure.  Let annuitants know to contact you before jumping on the cash now bandwagon they see and hear on TV, and refer them to a trusted business with a record of good rates and ethical practices.

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