KEY POINTS:
It was only a matter of time before Hanover Finance succumbed to the chill winds blowing through the debenture and property markets. But the company's decision this week to suspend repayments should serve as a warning to the celebrities who endorse financial instruments - and the people who treat those endorsements as having more than entertainment value.
Former One News newsreader Richard Long, whose voice was used to reassure investors that Hanover could "withstand any conditions" said this week that he was surprised and disappointed at the development and that he "really felt" for the investors, of which he was one.
But he should ask himself what business he had selling the credibility he had established in one field to market a business in an entirely different one. Former newsreaders do not, in any event, have a moral right to the credibility they market; it alights on them by nature of the job that they once did and of the institution that they did it for.
Likewise rugby legend Colin Meads, who spruiked Provincial Finance before it went into receivership in 2006 and former cricketer John Morrison who extolled the virtues of Wellington finance company St Laurence, the sponsor of his radio show before it got into strife last month: their opinions on rugby and cricket respectively may be of value, but it is at the very least questionable that they should seek to parlay sporting fame into being the public faces of organisations to which people entrust their life savings.
As in all matters of commerce, the buyer should beware. People who commit all their money to one investment on the word of a famous non-expert may not have exercised the prudence that should have attended on such decisions. They will doubtless beware of celebrities bearing endorsements in future. But the celebs themselves should reflect on the value of selling their names, lest circumstances beyond their control devalue the currency in which they trade.
