Unit 4: Marketing, Prospecting, and Sales Presentations Flashcards
3 Types of Communications with the Public
- institutional communications
- retail communications
- correspondence
Institutional Communications
written communication that is distributed or made available only to institutional investors but does not include a member firm’s internal communications
communications that include a ranking or comparison must be filed within 10 business days of first use (can be reviewed before or after use)
member firm or registered person bank S & L insurance company registered investment company investment advisor any entity with $50 million or more Governmental entity Employee benefit plan Person acting on behalf of an institutional investor
Retail Communication
any written communication that is made available to more than 25 retail investors within any 30 calendar-day period
anyone that is not institutional
must be approved by principal before use and must be kept in a separate file for a min of 3 yrs.
Correspondence
written or electronic communication that is distributed to 25 or fewer retail investors within any 30 calendar-day period
must be reviewed by principal
Public Appearance
participation in a seminar, interview, etc.
Independently Prepared Reprint (IPR)
any article reprint that meets certain standards designed to ensure that the reprint was issued by an independent publisher and was not materially altered by the member
must be approved by principal before use
Research Reports
document prepared by an analyst or strategist typically as a part of a research team for an investment bank or broker/dealer
Generic Advertising
promotes securities as an investment medium but odes not refer to any specific security
Omitting Prospectus/Tombstone Advertisements
tombstone advertisements are used to advertise mutual funds in newspapers and magazines and since they don’t have a prospectus they must describe where it may be obtained
cannot include info on how to purchase shares of the fund
Total Return for Mutual Funds
derived from appreciation in the value of fund shares and assuming the reinvestment of dividends and capital gains distributions
Mutual Fund material
must disclose the maximum amount of load or fee
Telephone Consumer Protection Act of 1991
maintain a Do Not Call list of customers who do not want to be called and keep a customer’s name on the list for 10 years from the time the request is made (31 days to put them on list)
calls must be made between 8am and 9pm of prospect’s time zone
Qualifications of max. 8.5% open-end mutual fund charge
- break points (a scale of declining sales charges based on the amt invested)
- rights of accumulation
Break points
allow sales charge discounts from front-end load
for married couples, parents and their minor children, corporations, and certain other entities
no industry standard breakpoint schedule
breakpoint schedule for a mutual fund is given in full in the prospectus
Letter of Intent
for a person who plans to invest more money with the same mutual fund company and immediately decrease his overall sales charges
good for a max of 13 months and may be backdated 90 days
if LOI is not completed, sales charge amount that applies is based on the total amount actually invested
share appreciation and income paid by the fund do not count toward completion of the letter
