UTS Library

Soft Dollar: Leading the Industry

Client: 

Associated Planners Financial Association

PR Company: 

Text 100

Award Category: 

Award Type: 

Call Number: 

2004 E 4

Year: 

2004

Executive Summary: 

Soft dollar payments have been a part of the Finance industry for some time, however with increasing pressure for stricter corporate governance there was a call for soft dollars to be banned.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Working with Associated Planners Financial Services Limited (AP), Text 100 devised a PR strategy that mapped directly to the objective of promoting AP as a thought leader in the financial planning industry on ethical work practices.

The strategy called for the formation of an industry working party led by AP to investigate the soft dollar issue. The working party would then define what constituted a soft dollar payment, whether or not they influenced advisers recommendations to clients and place working guidelines around how they should be treated.

The formation of the working party and its subsequent findings were communicated to the industry via the media in two stages in November 2003 and March 2004.

The campaign achieved excellent results in terms of both media coverage and industry feedback. Post-campaign evaluation revealed positive coverage in all key publications. AP also received requests for the recommendations from established industry leaders.

Ultimately, AP was seen as taking a responsible stance to the issue of soft dollar early on in the debate.

Situation Analysis: 

The financial planning industry has attracted criticism for its lack of transparency and perceived corruption. A report released by ASIC and ACA early last year labelled the financial planning industry as unethical and called for the industry to clean up its act. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

A major case in point was the wide spread practice of soft dollar payments from product providers to advisers to encourage use of their products. However there was confusion in the market as to what constituted a soft dollar payment, when it was acceptable and when it wasnt. There needed to be a clear definition on the matter so that those involved could make a decision based on clear parameters rather than rhetoric. It is a complex issue and one that required due consideration.

The Financial Planning Association had been looking into the issue however there was a distinct lack of industry participants putting their hand up to discuss the issue.

Associated Planners wanted to take the lead in the discussion on soft dollar payments and put an end to the practice of accepting them.

Associated Planners called for a strategy that would ensure that they responded to the issue responsibly. By simply going out to the media and making a statement that they were banning the practice without fully examining the issue and defining the parameters would have not achieved the objective. This exercise was not about grabbing headlines for the sake of it, rather it was to seriously look at the issue, amend business practices and use that to attract the media coverage the initiative deserved.

To this end, Text 100 suggested Associated Planners head an industry working party to investigate the issue and make recommendations to the industry at large.  

Research: 

Target Policies: 

Preliminary research by Text 100 clearly identified the following target publics, their existing attitudes and the role they would play in achieving the campaign objectives:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Financial Planning industry

  • Financial Planners (possible recruits)
  • Fund Managers (partners and companies providing soft dollar payments)
  • Industry bodies (those also examining the issue)

Consumers

  • Consumers getting advice and buying/investing in products from financial planners

Key stakeholders

  • Employees
  • Working party participants

Communication Strategy: 

The communication strategy for Associated Planners centred around the formation of the industry working party examining, defining and making recommendations on the treatment of soft dollar payments. This was to be communicated to the industry via the media through a series of interviews and supported by a press release.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

The communication strategy sought to communicate to the marketplace:

    • A clear definition of what a soft dollar payment is and what it is not (i.e. is conference sponsorship a type of soft dollar payment?)
    • That Associated Planners takes its ethical obligations very seriously
    • That Associated Planners is taking a considered approach to the issue of soft dollar payments and is not reacting in a knee-jerk fashion
    • That the issue of soft dollar payments is a complex one and needs to be dealt with accordingly.

Implementation: 

The campaign was carried out in two stages.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Stage 1: Announce the formation of the working party

Stage 2: Announce the recommendations of the working party

Stage 1

Preparation and background:

Research: Text 100 conducted research into the issue and possible media targets.

Industry partners: Associated Planners recruited industry participants to become the foundation members of the working party. The following companies were represented:

      •         Associated Planners
      •         BT Financial Group
      •         Guest McLeod
      •         Credit Suisse
      •         <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Norwich
      •         Challenger

Announcement: Text 100 drafted a press release, secured media interviews and prepared a briefing document with a thorough Q & A. The media interviews were held in the lobby café of the Hotel Intercontinental in Sydney.

Text 100 briefed the spokesperson Ray Miles, thoroughly prior to the interview and ran through possible interview scenarios. Text 100 also facilitated the interviews, distributed the press release and ensured follow up with the media was complete.

Post announcement: Text 100 prepared a debrief report of the announcement including analysis of the media coverage. Text 100 also made recommendations for the second phase of the campaign.

Stage 2

Preparation and background:

Research: Text 100 liaised with the members of the working party and was briefed on the final recommendations. Possible issues were discussed and resolutions put in place.

Spokespeople: The original spokesperson Ray Miles was unavailable however Deputy Managing Director Andrew Creaser was able to participate. Text 100 also suggested the inclusion of another spokesperson from the working party to ensure that the working party was seen as in industry initiative and not the sole work of Associated Planners. This would add weight to the credibility of the announcement.

Announcement: As with the first stage, Text 100 drafted a press release, secured media interviews and prepared a briefing document with a thorough Q & A. Text 100 also provided the recommendations in a table format to the media.

The media interviews were to be held in the lobby café of the Hotel Intercontinental in Sydney, however on the morning of the announcement, the venue was changed to include conference call facilities for journalists who could not make the interview in person.

Text 100 briefed the spokespeople, facilitated the interviews, distributed the press release and undertook media follow up.

Results: 

The launch of the working party and subsequent recommendations resulted in 14 interviews and more than 17 pieces of positive coverage in trade, business and consumer finance press.

Following the announcements, there was strong momentum and ongoing discussion of soft dollar in the media and financial planning industry, with calls made to Associated Planners from fund managers and other dealer groups to discuss how they are treating the issue.

Analysis conducted by Text 100 concluded:

  • 100% positive coverage
  • All coverage included at least one message about the need to define soft dollar payments to clean up the industry 
  • 17 pieces of coverage in trade, business and consumer finance press 
  • Industry: At least four calls by industry participants asking for a copy of the recommendations. This included the industry associations Financial Planning Association and Independent Financial Advisors.

See Appendix A for coverage results.

Evaluation: 

As part of the campaign evaluation the results were assessed against the SMART goals agreed at the beginning of the campaign.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

 

SMART Goals (measures)

Results (Evaluation)

Educate the market on Associated Planners position on Soft Dollar payments

All of the media coverage articulated Associated Planners position on soft dollar payments saying that the company was going to/had defined what constituted a soft dollar payment. These were then categorised into what was banned, what was acceptable with disclosure and what was banned.

Associated Planners received calls from other industry players requesting a copy of the recommendations.

 

Inform the media about the formation and recommendations of the working party through the media

 

All of the coverage referred to the formation of the working party, named the participants and in the second stage, stated some of the recommendations. Some publications carried a table outlining the recommendations supplied by Associated Planners.

Position Associated Planners as a leader in the financial services industry through thought leadership

The coverage positioned Associated Planners not only as a thought leader but also as a leader in the financial services industry. One article referred to Ray Miles as one of the professions leading practitioners.

Build and enhance relationships with key journalists

Feedback from the journalists was positive with all involved in the first stage following up the story in the second stage. One journalist even congratulated the spokesperson at the beginning of the interview on leading this initiative.

Demonstrate Associated Planners commitment to independence

Quotes in the articles demonstrated that Associated Planners is taking a stance to clean up the industry.

 

Campaign Activity SWOT

 

Strengths

Weaknesses

Strong news story

Credible spokespeople

Good timing in terms of media interest

High profile working party participants

Positive results

 

Some news outlets did not understand soft dollar. Perhaps more explanation could have been given in the press release

 

Opportunities

Threats

Widen the media outlets to include broadcast

Continued comment on the issue

Respond to association findings

FPA and IFSA coming out with own recommendations contrary to the working party

Negative reaction from fund managers

Rogue advisers acting contrary to Associated Planners policy