Two years ago, investment company EF Hutton relocated its headquarters to Springfield, Ohio.
The firm accepted a generous tax-incentive package, promising to invest millions of dollars and create up to 400 jobs in the city.
Some Springfielders say EF Hutton’s progress on these ambitious goals has been too slow. Now, EF Hutton officials hope a newly launched social-media investment platform will help convince the naysayers.
Long before E-Trade Financial Corporation and Bitcoin grabbed headlines, EF Hutton was the big name in investing.
In the late Seventies and early Eighties, the company had a wildly successful advertising campaign. The television spots typically featured a couple of people talking about their stocks in a crowded place, such as the bandstand at a parade.
“Well, Frank, my broker is EF Hutton. And EF Hutton says ...,” went one commercial. At the mention of EF Hutton, the parade stops and everyone leans in—hoping to overhear some solid stock tips.
Then, the famous tagline:
"When EF Hutton talks, people listen."
Watch a vintage EF Hutton television commercial:
Like a lot of financial firms in the Reagan era, EF Hutton got into trouble for some questionable practices. The company wound up being auctioned off after a market collapse, and eventually became a faded memory for most consumers.
So, it was a bit of a surprise to some in the financial services industry when EF Hutton reinvented itself a few years ago, and not on Wall Street this time, but in downtown Springfield.
"We wanted to show our commitment to Main Street, USA. Our focus is on average American investors, not hedge funds and institutions and Wall Street investors,” says EF Hutton CEO Chris Daniels.
Daniels is taking EF Hutton in perhaps an unexpected direction. The company still offers the financial services you’d expect, such as traditional investment advising and an online trading service. But EF Hutton also offers mobile phone network, with plans that include unlimited talk, text, and trading.
And, the company has also recently launched a service they're calling Meggalife. It’s a social media platform with a unique pitch.
The idea is for Meggalife users to earn money for retirement by using social media. It’s designed to work like Facebook or Instagram, but instead of pocketing the profits, EF Hutton officials say they’re going to give 100 percent of the site’s net ad revenue back to users.
"It turns the economics of the internet upside down. Other social networks take your time and your data and provide no monetary value whatsoever in return," says Daniels. "What our network does is provide people with points that they accumulate as they use it, and then they can redeem those points later for cash.”
These aren’t like credit card points that you can cash out anytime. Daniels says all of the net ad revenue from Meggalife goes into a trust. Users get a slice of that pie, and at 68 years of age, they can cash in, he says.
Daniels says the platform could help some Americans save more, especially people who aren’t saving enough for retirement.
"America actually ranks only 136 in the world for its savings rate. Part of that has to do with the fact that many people live paycheck to paycheck, and it’s hard to save money when they’re doing that.
"We recognize that that’s a tremendous issue, and we found an innovative way to provide people with a way to accumulate assets," Daniels says.
EF Hutton will be the investment adviser for those assets, which is how the company would make money from the network.
EF Hutton is investing heavily in Meggalife. The company poured millions of dollars into this and other projects last year. It raised just shy of $10 million over the last couple months. And that’s given a little boost to the Springfield economy.
EF Hutton has created 50 jobs so far, and it’s hiring for another 30 positions in the city, including software developers, marketers and writers.
EF Hutton officials say all that hiring is progress towards the company’s goal of creating 400 jobs over five years.
But not everyone is Springfield seems sure what E.F. Hutton is up to.
A burger sizzles on the grill across the street from the EF Hutton tower, at a Fifties-style diner called the Fountain on Main. A few people eat lunch at a counter.
Employees Joshua Ketelsen and Hillary Pamer say EF Hutton has been good for the local economy.
"We do get a lot of their people for lunch and whatnot, I would say they did add jobs. I have a couple friends who work there," says Ketelsen.
When asked to name what sort of company EF Hutton is, Ketelsen and Pamer say they're not sure. They have a similar response when asked about EF Hutton's new social media-investment platform.
"Have you heard of this product they’re trying to launch called Meggalife?"
"No," say Pamer and Ketelsen. "Nope."
The coworkers say they are social media users. They say Meggalife sounds intriguing, but they’re already comfortable following friends and family on Facebook and other, more established sites.
"So, would you be tempted to move over?," asks WYSO Community Voices producer Jason Reynolds.
"I don’t know. It would have to have really good benefits. And I don’t know what my friends would be doing. If my friends aren’t on there, it wouldn’t be worth it," Pamer says.
It may be tough to pull Ketelsen and Pamer away from their current social media habits. But the folks at EF Hutton are hoping Meggalife catches on.
And, they’re hoping more people will go back to listening when EF Hutton talks.