Blog
Will my firm’s marketing compliance programme enable or restrict sales teams?
“Will I be restricted in my AIF marketing & sales activities by our cross-border marketing compliance program?” Over the years, so many AIFM/Asset Manager sales teams (Marketing & Client Relations, Investor Relations) have asked us this. They wonder: “Will my hands be tied by overly restrictive compliance programmes that impede my ability to bring in investor tickets in our funds to the firm?”
Since 2006, Global Sales Compliance (GSC) has worked closely with AIFM/Asset Manager marketing and sales teams to ensure compliance with cross-border marketing rules. In this blog, we share our message to sales teams of AIFMs/Asset Managers about the effectiveness of a cross-border marketing compliance platform as an enabler of overseas business development.
What is a Marketing Compliance Platform?
A marketing compliance platform is a compliance programme that ensures the firm and its sales teams:
- Are informed of local fund/financial service marketing regulations
- Comply with fund and/or licensing registrations where required (or operate under local exemptions which have been confirmed)
- Sales team’s sales practices comply with local laws (and)
- Sales teams are trained in local marketing regulations.
These core-four pillars support a reliable, strong platform that sales can “stand on” to fundraise in funds or financial services legally cross-border.
When you don’t have a Marketing Compliance Platform
The opposite situation to a marketing compliance platform would be a lack of such a platform firmwide, with these results:
- The firm has no knowledge of local country regulations on fund and financial services marketing and no priorities to investigate local regulations
- The firm has not complied with fund or licensing registrations where required (and has not investigated exemptions from registration)
- The sales team’s activities are unmonitored, no compliance controls are in place and there is no management oversight of their activities (and)
- Sales teams are not trained on local country marketing regulations.
A robust marketing compliance platform is as vital to a firm’s successful cross-border fundraising efforts as the sales team itself and good investment performance: It is mission critical.
See our Blog: Mind – but close – the Marketing Compliance Gap
Fundraising priorities of sales teams
Any sales team fundraising cross-border has the ultimate objective to bring in investor tickets to the AIFM/Asset Manager’s funds and/or financial services. That is what they are paid to do. Sales teams don’t want their hands “tied” from bringing in investor assets to the firm. So how can a marketing compliance platform enable sales activities?
Marketing Compliance Platform: How it ENABLES Sales
Our message to sales teams is that a cross-border marketing compliance platform is an enabler to business development and is mission critical for fundraising overseas. A robust marketing compliance platform:
- Enables legal fundraising (vs. illegal marketing)
- Enables strategic marketing campaigns: you can focus on “low-hanging fruit.” See our Blog: “What’s the best way to fundraise cross-border?”
- Enables faster fundraise
- Enables a stronger sales pitch to investors: Marketing compliance knowledge by sales teams is a powerful sales tool
- Enables the firm to maintain a good reputation: Investment in a strong business franchise
- Sales teams get their bonuses faster
During our Sales Road Map© training sessions, we ask sales teams, “Do you really want to fundraise illegally in any foreign jurisdiction? Or would you rather be safe and follow the local rules on marketing?”
Bringing in investor tickets in the firm’s investment vehicles as a result of illegal marketing is a high-risk game. It is the person/entity conducting the breach of country marketing regulations that is liable for penalties, which can include criminal sanctions and investor lawsuits. Sales teams can go to jail in many countries for breaches of local marketing regulations.
See our Blog: 5-Key Distribution Risks for Cross-Border Marketing
If sales teams have a basic knowledge of your target investors’ local country marketing regulations, this is a powerful and impressive sales tool that will put your pitch ahead of the competition. We have observed a growing trend by regulated institutional investors who actually care whether the AIFM/Asset Manager selling the alternative investment fund to them is compliant with the investor’s local marketing regulations. Regulated institutional investors want to know that sales teams are not only informed of the investor’s country marketing regulations but are compliant with these regulations.
See our Blog: Is marketing compliance by MCR teams a powerful sales tool?
Marketing Compliance Platform: How it RESTRICTS Sales
Here’s how a robust marketing compliance platform “restricts” sales team activities:
- Mitigates risk of “blow-ups” via breaches of local marketing regulations
- Mitigates risk of the firm, management and/or salespersons paying large fines ($/EURMM) due to breaches of local marketing regulations
- Keeps sales teams out of jail
- Restricts sales campaigns from wasting precious fundraising time
- If used properly, an effective marketing compliance platform can restrict a disorganised, non-strategic cross-border marketing campaign
In summary, our message to sales teams is: A robust marketing compliance platform is an ENABLER of your overseas fundraising efforts because of your compliance with local marketing regulations. You bring in tickets faster. You get your bonus faster.
A robust marketing compliance platform is RESTRICTIVE in that, if compliance implementation is effective, it can keep sales teams out of jail and out of trouble with the local regulator.
Sales Road Map© training is key to an effective marketing compliance platform.
Begin exploring SRMO now
Sales Road Maps Online®: “Transforming marketing compliance®”