ifa looks to take £40,000 from each of eight providers to fund ADVERTISING initiative
Leading intermediary firm Torquil Clark has sent out marketing proposals to providers, which include an offer for 'plugs' for their products.
In a letter to 21 fund groups and life companies sent out in May, Torquil Clark outlined a proposal for what it termed a 'partnership' with providers. At the end of the letter, Torquil Clark includes an advertising proposal, asking for £40,000 in exchange for an A4 ad in the group's brochure. It states: 'We will PR the brochure, will mention it in bulletins and on the website and the adverts will support our 'partnership' approach.'
This approach, outlined in the letter, entails twice-yearly product 'plugs' in Torquil Clark's client brochures and positive comment in the national press where possible.
Torquil Clark emphasised the head of its investment committee, Philippa Gee, has strong relations with financial journalists on every national newspaper and is often asked to provide quotes on product-related issues.
Don Clark, managing director of Torquil Clark, wrote in the proposal: 'A 'partnership' approach with Torquil Clark would dynamise business potential and there are a number of ways in which we can be of help to each other. Supportive PR can be extremely valuable to product providers.'
Clark stressed early notification of potentially negative developments, such as fund manager changes, can be offset as part of a co-ordinated defensive PR arrangement.
After Investment Week obtained a copy of the proposal last week, Torquil Clark sent out follow-up letters to product providers, clarifying its proposal was not a cash-for-quotes service.
Clark told Investment Week the requests for partners and advertisers were separate although 'there is some commonality between partners and advertisers.'
In the follow-up letter to providers Torquil Clark noted some of the emphasis in the original proposal was unintentional and regrettable and stressed the group was fully independent. The intermediary group is looking to find eight advertisers for its 2003/2004 campaign and Clark told Investment Week five fund managers have been signed up so far.
Clark insists the motives behind such partnership arrangements are not in conflict with Torquil Clark's independent status. He believes many other intermediaries' arrangements with product providers, such as mail shots and sponsored supplements, are less palatable.
He said: 'I was very critical of the so-called guides a few years ago and complained to the FSA and sent them copies of the guides. I felt it was short-sighted and product selection based on product providers' chequebooks.'
Clark claims the largest advertisers are typically the groups with the strongest products and through forging close ties with them he can negotiate better rates for his clients.
He conceded he had not considered whether clients receiving fund recommendations from Torquil Clark would put as much weight behind the advice if they knew the product provider had a partnership arrangement with Torquil Clark.
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