Some IFAs have never used direct marketing, relying instead on the snowball effect of accumulated personal referrals. Others, however, have had recourse to direct marketing, either to bring in new clients or target existing customers with new business.
Misys head of marketing Andrew Bedford says an IFA who wants to carry out an effective direct mailing needs to sit down and carefully consider what they want to achieve. In particular, he suggests the IFA should consider what is profitable and the profile of those he intends to target.
Marshall Williams & Co managing director Ian Will-iams thinks it is important to consider the target audience not only in what you want to sell but also in terms of creating documentation that will not cause a negative reaction.
Both Williams and Bedford also suggest it is more effective to send out smaller, highly targeted mailings as it is more manageable for the IFA and the effectiveness can be gauged more easily.
Given the limited budgets of IFAs, Bedford says it can be effective to piggyback on bigger campaigns of the product providers, particularly during the Isa season. He says: “If you have 15 different mailshot from Isa providers, a good IFA should be saying to the prospective client: “Isn't this confusing? Do you want help on the subject? These are the Isas we recommend, come and see us.” Likewise, the mailing can be connected to something just launched or in the news to capitalise on existing awareness.
As far as IFAs are concerned, there are two methods of direct mailing – by post or email. Email is cheap – there are no postal or design costs incurred – and can be achieved with a minimum of effort but Williams also points out it can be easily disposed. “Paper is harder to get rid off. It also allows you to be more creative and use visual impact and colour,” he says.
Williams, who is a chartered marketeer as well as an IFA, advises that IFAs could go to the Chartered Institute of Marketing and its website for guidance.
IFAs who are looking to buy mailing lists can go to companies such as Experian and marketingfile.com, where they can be bought online. Experian senior product manager Patrice Bendon says an IFA coming to the company has two main options – simple demographic lists, costing £70 per 1,000 or the more sophisticated Prospect Locator Financial, a service principally aimed at IFAs. This costs more at £200 per 1000 records, with an extra £50 for phone numbers but allows an IFA to select specific data about what products the audience already have and want to buy. The company offers basic advice on its website, where lists can be bought and downloaded.
Another option for IFAs is to buy a complete service, such as that offered by Positive Response, which is an appointment-maker specialising in financial advisers. Operation manager Rachel Nunn says the company can offer the adviser highly geographically targeted introductions with detailed financial breakdown for £50 for each appointment made.
Going to an agency to handle direct mailing is another possibility but Williams warns that an agency can talk the IFA into doing something inappropriate or ineffective. Alternatively, some of the providers can help IFAs with generic marketing documentation and assistance but have to be careful not to fall foul of the regulator's indirect-benefit rules.
Data protection is an important consideration for any IFA holding data on their computers. Given the increasing lifestyle content of application forms, most IFAs will be registered on the Data Protection Register. IFAs will also need to ensure they comply with data protection legislation, such as making sure they do not mail people who have said they do not want to receive mailings.
Bendon's advice is to concentrate on the offer. If anyone feels unhappy at being contacted, the company can tell them how their contact details were gathered and when they agreed.
Like many others, she emphasises the importance of making it easy for the potential client to respond to the mailing, featuring a phone number or internet site prominently. Something often forgotten but which Bedford says is important, is to get the maximum value out of a mailing by following it up with a phone call.