Although Putnam Investments of Boston is best known for its multi-year print advertising campaign under the theme of truth-in-labeling, its Nov. 10th full page ad in The Wall Street Journal, The New York Times, Boston Globe, Boston Herald, The Washington Post, USA Today, and St. Louis Dispatch, and, on the following day, the Financial Times, definitely raised some eyebrows.
The ad, which ran less than two weeks after Massachusetts regulators and the SEC charged the firm with securities fraud, assures that Putnam is "actively addressing the issue of market timing."
The ad promises that Putnam will lead the mutual fund industry's reform by restoring "accountability, integrity and confidence." Formatted as an open letter and signed by the firm's new top three executives (see Executive Moves, page 10), the advertisements were installed in the wake of the forced resignation of Putnam's veteran president and CEO, Larry Lasser.
The message to readers was: We are changing Putnam Investments for the better. "Putnam's intent (was) to address recent issues and restore investor confidence," said Putnam spokeswoman Laura McNamara.
"I was surprised to see it. They were being extremely proactive and promising to address the problem of integrity and trust," said Dan Sondhelm, partner with SunStar, public relations and strategic marketing firm in Alexandria, Va.
While it is great to be proactive rather than reactive, there is one danger, he added. "The scandal isn't over yet." Putnam can apologize for this, but what happens if it is further implicated in other illegal or unethical industry activities? Will the firm be seen as being truly sincere if it has to apologize again for other problems?
"I think Putnam is in really deep trouble. They are bleeding assets," said Edward Moed, managing director and co-founder of Peppercom, a strategic communications firm in NY. An openly apologetic ad, such as Putnam's, can help to a certain extent, he said.
But these types of soul searching ads, which came into vogue with the Ford/Firestone tire crisis of a few years ago, are now also-rans, Moed said. "I think their value has been watered down," he added.
Firms must be willing to present the same apologetic message multiple times to multiple audiences in multiple venues, he added. It is important to keep communications flowing even if a firm is in the middle of its own internal investigation, and hasn't yet determined if suspect activity has occurred, Moed counseled.
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