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Thursday May 20, 06:00
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Putnam Focusing On Satisfying Current Customers
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In the wake of a market-timing scandal that has cost Putnam Investments billions of dollars in outflows, the firm is focusing on retaining current clients, hoping that good service attracts new money. "The primary goal is taking care of the existing clients in terms of investing results," said Ed Haldeman, president and ceo. "If we do a good job there taking care of our existing clients, we will attract others and have growth in our business."
Rachel Barnard, Morningstar analyst, said the first priority for Putnam, as well as other scandal-implicated firms, should be "assuaging the fears" of institutional clients. "Those investors also keep a very close eye on things, and are more savvy than smaller investors," she said. "[Putnam] has to show here’s how our compliance staff works, here’s how we’re going to make sure this is never going to happen again." Putnam has already paid $110 million in fines and restitution for charges related to market timing. Further, the firm has examined all trading records since 1998, and reminded all employees in meetings and e-mail about fiduciary responsibility. "In a sense, it’s a form of sermonizing," Haldeman said.
(Fund Marketing Alert)
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