Ameriprise Financial Services Inc. assesses the expected efficiency of direct mail marketing campaigns in a letter seeking advice from the U.S. Securities and Exchange Commission.
Ameriprise Financial, Minneapolis, sent the letter to the SEC’s Division of Investment Management to ask whether it could leave 1 of 2 important brochures out of “co-branding letters” sent to customers of outside retailers, such as department stores.
The SEC ruled that the company could leave 1 of the brochures, an “advisor’s brochure,” out of the mass mailings.
Susan Olson, a senior counsel at the investmens management division, summarizes the Ameriprise Financial letter in a letter ruling giving her views about how the SEC would react to the campaign.
The letters would be signed by an Ameriprise Financial officer. Some would offer free financial planning information, such as retirement guides; some would offer free financial planning information along with free in-person meetings with Ameriprise Financial representatives; and some would simply offer free in-person meeting with Ameriprises Financial representatives.
An independent marketing firm would get the letter from Ameriprise Financial and the mailing lists from the retailers, and the marketing firm would mail the letters to customers of the retailers who appeared to meet Ameriprise criteria, Olson writes.
Ameriprise Financial would not see the customers’ addresses or other personal information. It would include a disclosure in the co-branding letters noting that it had paid the retailers to introduce it to their customers, Olson writes.
Normally, SEC rules would require Ameriprise Financial to include both a “solicitor’s brochure” and an “advisor’s brochure” with the mass mailings.
But American Financial told the SEC “that it is very expensive to print and mail those materials,” Olson writes.
Ameriprise Financial asked for permission to save money by providing copies of the advisor’s brochure only to consumers who actually showed up for in-person meetings with Ameriprise Financial representatives.
Ameriprise Financial estimated that out of 100,000 mass-mailing letters simply offering an in-person meeting, the company would get 600 responses, and between 75 and 120 persons responding would actually attend in-person meetings, Olson writes.
Out of 100,000 mass-mailing letters offering financial information, the company would get 2,000 requests for information and eventually attract 75 to 90 customers to in-person meetings, Olson writes.
Under the scenario described, the SEC would refrain from starting an enforcement action if Ameriprise Financial waited to deliver the advisor’s brochures at the in-person meetings, Olson writes.
A copy of the SEC letter ruling is on the Web at Document Link