By Peter Bates

"Enron Case Illustrates 401(k) Flaws," "The Markets Keep Following the Drums of War," "Fear of Stocks Could Mean Risking Failure,"—these attention grabbing headlines sound straight out of The Wall Street Journal or Barron's.

Yet they are from the Sterling Quarterly Review, one of four newsletters published by Sterling Financial Group, Inc., of Newton, Mass. Jonathan Price, CEO, believes that his newsletters are a vital component of his business. They keep his clients informed of changing market conditions, attract new clients and offer other benefits that lead to the growth of his firm.

But it wasn't always this way. When Price founded his company in 1985, he had no plans to offer a newsletter. He built his practice through word of mouth and referrals and stayed in touch with them by telephone. Then, about five years later, he decided to publish a newsletter for his clients.

"It was terrible," he says of this first effort. "I bought it from some company, they pasted my name on it, and nobody ever read it. It looked like an insert flyer from a monthly bank statement." Price soon abandoned the effort and tried again in 1995. He used another service and contributed an article with each issue. "(I got the) same results. People just glanced at it and threw it out. I could tell because no one ever called to discuss the topics," he says. He stopped using the service after a few issues, considered authoring one himself, and then realized it would be too time consuming to be cost effective.

By constantly staying in touch with his investors via newsletters, Price creates clients who are aware enough of their options to make informed decisions.

Try, try again
An old expression says, "Third time's a charm," and it was for Sterling Financial. He tried once more in 1998. By then he was on a "communications kick," launching his website and deciding to investigate bulk emails for his clients.

He'd read about yet another service that offered newsletter articles to financial advisors and decided to give the new company a try, but only if he could have some control over the content. After Price contracted the company, he discussed the direction of the newsletter with them. Sterling employee Kathy Pauling designed the logo and graphics and contributed to the layout design. Every quarter, the newsletter editor sends Price an email with a list of articles. Price picks several for each issue and contributes one or two himself, often with editorial guidance from the editor.

What are some typical topics covered in the Sterling Quarterly Review? Sometimes the articles pick up on current headlines in the evening news. For example, "Enron Case Illustrates 401(K) Flaws" warns investors of restrictions in company retirement plans and overinvesting in company stock. "Would a Nursing Home Bankrupt You?" constructs a harrowing scenario for a fictitious couple, then urges readers to consider long-term care insurance policies. Price's article "Could the Sun Be Coming Out for Stocks?" presents the case for optimism—July market indices closing at 12-month highs—yet tempers it with his desire to see a stronger labor market.

Generating calls
The client response has been overwhelmingly positive. If Price runs an article about the bond market, clients call for more information about bond purchases. Since Sterling Financial handles 401(k) plans for certain companies, it's not unusual for a CEO to requests multiple copies for his employees. Price is even considering increasing the printing from its current 1,000 issue run.

When the market changed three years ago, Price felt the need to communicate more frequently, so he decided to write and distribute a weekly e-newsletter called Market Updates. His goal: to inform, reassure and educate. And Sterling also sends out a quarterly e-newsletter called Market Commentary with intriguing titles like "Half Full or Half Empty?" "Rising or Falling?" (All e-newsletters are also available on the company's website.) To those who are computer-disadvantaged, Price's staff mails hard copies monthly.

Another print newsletter, less formal than the other two, is aimed at his corporate 401(k) accounts. Every quarter, he sends out a one- to two-page report about stock and bond markets, including a recap of the plan's funds. "We try to reiterate the basics of investments, offering advice like if you're close to retirement, don't get too aggressive."

"In all of our newsletters," concludes Price, "we want people to focus on long-term goals and not get too caught up in world events." By constantly staying in touch with his investors via newsletters, Price not only builds investor confidence, but also creates clients who are aware enough of their options to make informed decisions.

Peter Bates runs Bates Communications, a marketing communications firm in the greater Boston area. You can contact him through pbates@batescommunications.net or his website at www.batescommunications.net.

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