Life offices are spending up to five times more on advertising their investment funds than pure fund managers but with sales typically around five times smaller.
Figures released in the UK fund industry review 2001 show life office ad spends on funds account for as much as 1 per cent of gross sales while fund managers are on average spending around 0.1 per cent.
Prudential spent £4.1m on advertising its unit trust and Isa business in 2000 but took just £442.9m in sales. At the opposite end of the scale, Threadneedle spent £1.6m on its 2000 ad budget, bringing in sales of £4.1bn.
Pearl, Royal & Sun All-iance, Legal & General, Cler-ical Medical, Norwich Union and Standard Life are among the top 10 least effective advertisers.
The most effective of the big fund managers was Baring Asset Management, which turned over £2.5bn in gross sales from an ad budget of only £142,534.
The review, which is the first to produce comprehensive gross sales figures for last year, shows that pure fund managers still dominate the UK investment market. The top 10, led by Fidelity, Threadneedle and Gartmore, are all pure fund management houses.
But while the pure investment houses have the biggest monetary sales, the banks, life offices and building societies fare better in terms of accountholders. Scottish Widows, Legal & General, Halifax, Barclays and Norwich Union all make it into the top 10 in terms of unitholders, demonstrating their strength at the bottom end of the market.
Aberdeen took the leading share of the IFA market last year, accounting for 9.65 per cent of all intermediary sales.
Henderson, Threadneedle, Fidelity and Newton complete the top five, with boutiques such as ABN Amro, SG Asset Management, Artemis and Liontrust all within the top 20.
Ptarmigan media director Hugh Perkins says one reason for the low effectiveness of life office advertising is that they target a more general market.
He says: “The specialist fund managers see the personal finance sections as a shop window, whereas the life companies tend to spend outside. They have tended to try to convert everyone to try and buy their funds.”