CTA Advertising and Marketing Issues to Consider

By Bart Mallon, Esq. (www.colefrieman.com)

Marketing for Small CTAs

For small commodity trading advisory (CTA) firms, marketing and advertising the expertise of the principals is a central way to gain new clients and make more money.  This overview is for the CTA Expo 2009 program entitled Marketing for Small CTAs. The program was sponsored by Traderview and featured Frank Pusateri of Adirondack Portfolios as well as Bucky Isaacson of Future Funding Consultants. While I was unable to catch this beginning session of the CTA expo 2009, I was able to catch the last ten to fifteen minutes of the session, which I found to be particularly helpful (for small and start up CTAs) as well as interesting.  It seemed like many of the participants were engaged as well.

General Background on CTA Advertising

CTAs are allowed to market and advertise their services.  Unlike hedge fund managers, who are prohibited from marketing pursuant to Regulation D and other federal and state regulations, CTA advertising has the potential to reach a large portion of the investing population – CTAs can and should take advantage of such marketing rules.  [Note: we will be providing information at a later date regarding some of the legal and compliance issues that CTAs should be aware of when developing a marketing program.]

A good marketing program will be multi-faceted and will include a website (including potentially a blog), direct email campaigns, listings in CTA databases, and networking events among other items.  The rest of this article will focus on CTA websites.

CTA Websites and Visitor Information

One way for CTAs to advertise is to put up a good and effective website advertising the manager’s services.  While it will take the manager some time to create the initial content and layout of the website, there is relatively little additional time needed to maintain the webiste.  Many of the updating functions can be outsourced as well, so the manager can concentrate on trading.

Frank noted that he had one CTA ask him what he thought about their website which cost $50,000. Frank said that it looked good but that the CTA firm did not ask for the visitor’s name, address or telephone number and that there was no place on the website to collect that information. This represents a lost opportunity because, presumably, visitors come to your website to find out more information about you – you in essence know that the people visiting your site are potential investors. Having visitors provide you with their basic contact information is equivalent to a warm lead and if you don’t even have a way to collect this then you are wasting opportunities.

Question Period

Frank was able to answer questions from the audience. One participant asked if Frank could name a CTA firm which did a good job at marketing themselves. He mentioned that he thought Northfield Trading did a pretty good job with much of their literature and marketing materials.

Many of the same issues, which were touched on during my brief time at this session, are discussed in later sessions in greater depth. We will examine these in turn.

The next article discusses Compliance in a Changing Environment which is sponsored by Woodfield Fund Administration and which featured Kate Dressel of Strategic Compliance Solutions as well as Patty Cushing of the National Futures Association.

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This article was first printed on the CTA Expo Blog.  Mr. Mallon also runs the hedge fund law blog and is committed to providing useful and easy to understand information for CTAs and CPOs which can be found in our CTA and CPO Registration and Compliance Guide. For more information on CTA registration or compliance services please contact Bart Mallon, Esq. at 415-868-5345.

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