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Friday, 5 April 2013

What would make a phone call about wine investment to a non-client acceptable?

Following a meeting before Easter with some members of the WIA and two members of the National Fraud Intelligence Bureau, here is in draft form (comments and suggestions are greatly welcomed) the conditions that I think would make a call to a non-client call acceptable.

A cold call is one to a stranger who does not anticipate a call and has not expressed an interest in wine investment. Such calls are not acceptable for the purposes of investment and are a high-pressure sales technique.

Calls can be made to non-clients who have expressed an interest in wine investment and who are aware that having expressed such an interest they can reasonably expect a follow up call. Increasingly this interest is likely to be expressed through a website. Companies should keep records of these leads to show that they were properly established leads and be able to produce them if challenged. If adopted by the WIA, these records should form part of the annual monitoring process.   

Obviously there have to be the necessary safeguards in place to ensure that potential client is not subject to inappropriate and high-pressure sales. At the start of the call the potential client must be given the opportunity to end the call. If calls are monitored then those called must be made aware that the calls are monitored. The threshold of high-pressure sales should be lower for the elderly and vulnerable.  

When a client places an order over the phone they must be made aware of their right to cancel as in line with the Distance Selling Regulations’ legislation.

This draft of acceptable conditions will have to take cognisance of any proposals and changes that are made by the new The Financial Conduct Authority (FCA), which has now taken over from the Financial Services Authority.  


Hugo Rose MW, chairman of the WIA, has called on the fine wine trade to support self-regulation and the WIA here in Harpers. A prerequisite of getting such support should be ruling out cold calls – ie those to strangers who have no reason to expect a call about wine wine investment.


  1. Unfortunately the members of the Wine Investment Association will never ban cold calling as it is the way all the members get their business.It is interesting that all the conditions they impose on themselves (and other members, of which there are none) are conditions which suit their current way of doing business, rather than protect investors. In his insufferably pompous article Hugo Rose expresses exasperation over the lack of industry interest in his association - why on earth can these four companies not see that why no one is interested because this association was not set up to protect investors, it was set up to advertise the four companies concerned.

    If this association banned cold calling then this would prove that it has investors' interests at heart and not just their own, and I am sure the trade would be far more positive about joining.

  2. Dear Jim

    You are Mistaken!!!! your agenda to stop cold calling on wine is flawed

    Companies will by pass any UK self regulation by moving into an EU country where it is not required and thus call back into the UK or a jurisdiction where they cannot be touched

    Cold Calling is a way of life and part of every day investment wine or otherwise

    1. Anon. Thanks the fact of being able to cold call from countries outside the UK shouldn't stop a UK based association from banning its members from cold calling. It will be interesting to see what the FCA do on cold calling.

  3. Anon 1: Thanks. I agree the WIA has to ban its members from cold calling.

  4. The following statement is a simple fact, and no argument will ever change this:

    The statement is:

    Any company that cold calls is not a respectable company.

    Full Stop.

    1. How do you think microsoft started?

      It had to COLD CALL investors...

  5. Jim,

    You say

    'A cold call is one to a stranger who does not anticipate a call and has not expressed an interest in wine investment. Such calls are not acceptable for the purposes of investment and are a high-pressure sales technique.'

    Cold calling is not a high pressure sales technique, cold calling is a platform for high pressure sales to take place if the caller is that way inclined to try and accumulate business.

    How do you expect a legitimate start up wine investment company to contact fine wine investors?

    1. Cold calling with respect to investment was strictly limited by the FSA (now replaced by the FCA) for those investments that came under its remit. This included wine funds. My primary concern is to try to protect investors. It is down to legitimate companies to find ways of attracting customers without using unanticipated cold calls.

      I disagree I find cold calls intrusive, highly unwelcome and a part of a high pressure sales strategy. Furthermore as far as I'm concerned they have a very negative effect on the company's reputation.

    2. I acknowledge your primary concern and applaud you for highlighting rogue firms, however feel that in the case of cold calling you are fundamentally wrong.

      In the financial climate and industry we are in finding ways of attracting customers without breaking the bank is near on impossible.

      I welcome you to think of one way you would find 'un-intrusive' as a way to find new customers, whilst not having a negative effect on the company's reputation?

  6. Utter drivel, Anon: "Any company that cold calls is not a respectable company" - What rubbish.
    Almost all entrepreneurs use a form of cold calling at the start of their business as a fantastic way to introduce their product to individuals that otherwise, may not have come across it.
    * This does NOT count as pressure sales!

    I have been cold called by a couple of wine investment companies in the last few months, where the chaps who called were perfectly pleasant, polite and informative. They made it very clear at the start of the call (after having asked if I was free to talk) that the only purpose of their call was to introduce their service and ask if I would be interested in further information. As it happens, I am already in the market so did not require their assistance, at which point they thanked me kindly for my time and I have not heard from either company since... Hardly the evil men you make them out to be!

    The bottom line is, cold calling is a perfectly legitimate way to grow a business AS LONG as it is conducted in the correct manner!

    1. Calling complete strangers who have not expressed any interest in wine investment is for me not legitimate.

  7. To the anon who started their comment "utter drivel anon", I ask, which wine investment company do you run / work for? It is obvious that you are not an investor but a director or employee of a wine company that cold calls: Probably one of the four cold calling companies that make up the "Wine Investment Association".

    As stated, whatever the counter argument, no company that cold calls is respectable.

    If you have so little business sense that you can't work out a way of finding business without cold calling, perhaps you should get into some other line of work?

  8. Jim

    again you say protect customers, there were many FSA companies that were and some still are regulated that fleece customers and banks as well, including Wills $ Co

    Cold calling is not really the issue as it did not stop regulated companies doing the dirty to the vulnerable, it just gave them a license to do it more openly and with a stamp of credibility from the now defunct FSA....

    1. Anon. Clearly stopping cold calling will not prevent fraud but would play a part in making it more difficult. With regard to Wills & Co it was censured by the FSA but Peter Shakeshaft says that all of the customers got their money back.

  9. Cold calling will never stop jim lets face it

    1. Speed limits don't stop people from speeding but that is not an argument for not having speed restrictions.

  10. Hi Jim

    please tell me, what is wrong with calling someone up from an investor list of sorts, where you have purchased prospective client lists with parameters i.e have investments,have alternative investments, do biz over the phone etc long as a salesman is not calling on the initial call or a sale is not attempted in the first instance, of course calls after a normal working day shouldn't really happen either, I don't think there is anything major wrong with that..If the potential client welcomes a further call and accepts the info, surely that's fine..

    If anyone here or yourself can think of a way to get a business off the ground first off please tell..

    Your point is absolute when talking of rogues, without doubt they will find a way round any legislation implemented but I do think flawed when saying it should be outlawed because then you get into the realms of who can and who cant, I understand its "investment" and not retail etc but that doesn't stop a certain energy company badgering me with calls to switch on a weekly basis..

    I hope this gets posted, its a valid point I think..

    1. Anon. Thanks. I can see no reason why an investor should be badgered by cold calls about investments they have expressed no interest in – wine, carbon credits, land banking, ostriches etc. The onus is on wine investment companies to establish properly established leads.

  11. JIM
    give it a rest,you are like a broken down record player that cannot play any other tune, there are far more important issues at present

    Cold calling will carry on legally or illegally from into the UK or within the UK

    1. Anon. Thanks. Factaually incorrect. Investments that came under the remit of the old FSA were not allowed to cold call strangers only existing customers. I doubt if the new FCA will allow it either. More likely that the rules will be tightened.

    2. Jim as i'm sure you're aware fine wine didn't fall under the remit of the old FSA as it is a non financial product nor is it likely to fall under the remit of the the new FCA so i am puzzled as to why you keep referring to the FSA guidelines.

    3. Anon. We both know it didn't entirely but I'm puzzled that you can't see the important of the FSA's guidelines on cold calling as a strong indication of best practice. Buying individual cases of wine as an investment was indeed outside the remit but not wine funds.

  12. Surely the fact that cold calling as a marketing practice makes it so easy for anyone to set-up a company with no financial backing, experience or expertise to start a wine investment company is one of the main reasons it has to be banned.

    By eliminating cold calling it immediately raises the barriers to entry into this market place - which when dealing with products that cost 1,000s of pounds and investors' money is surely a good thing?

    To the anonymous comment who questioned how it is possible for a new wine company start up to attract customers - think a little harder? there are loads of examples of wine companies that started off small and over time built up a customer base and reputation. That's how you do it - cold calling is a low-cost, quick fix which unfortunately doesn't promote new start ups developing expertise, USP's or customer service to attract customers and build a reputation.

  13. So it must be about time for the Wine Investment Association to disband, don't you think? Clearly no respectable company will ever join. An opportunity was there, but because the wrong companies did it, it failed.

    Had it not been set up in the first place to bolster their own reputations rather than protect investors it would no doubt have been a success, but as it turned out it was just a cynical marketing ploy.

    None of the companies had to change their dubious business models and they got loads of publicity.

    They should quit before their fraying reputations get even more tattered.

  14. As Far as I’m aware, companies offering private investments under FSA regulation are not allowed to cold call - and they seem to be doing fine. We see new ones setting up every day and if companies working in this sector could not survive as you say without cold calling, then there would be very few companies out there.

    As far as I see it the point about this is that the fine wine investment market wants the respect and recognition of not only the regulated financial markets, but also the people who invest in those markets.

    So therefore if the wine market wants that respect, they have to play by the rules and make the sacrifices that are made to earn that respect ...there are a couple of very good companies in the fine wine market - but these companies are being held back by the wine investment companies who whine and moan about how they have to cold call to get business, who just don’t do things properly, who have no knowledge of wine or investment – the shiny suit brigade.

    They want to act the part but don’t want to put the work in.

    I agree, the Wine Investment Association was set up by the wrong people – if you have monkeys writing the charter, then it will be worth peanuts.

    Maybe if they could take off their rose-tinted glasses for one second and try and lose the self-important rubbish they chant through their pr agencies , they would realise they are doing more harm to the wine industry than good.

  15. Jim,

    One imagines the prime reason these firms struggle to establish a more effective and consensually approved form of marketing - other than cold-calling - is because they seem to all spend their days commenting on your blog..

    They're not even imaginative to come up with a fake name!

    Bottom line - the only people who condone cold-calling are those who implement said practice as a marketing technique. Everyone else dissaproves, simple.

    Until the WIA actually adopts a proactive stance on the spurious practice of cold-calling, they exist almost solely for the purpose of artificially elevating the status of their members.


  16. reference 13;08 7th april.
    Havent denied being someone who has cold called and am not trying to hide the fact..

    All I was pointing out, was no badgering takes place at all as a salesperson goes no where near a "lead" until they accept a brochure/info pack and until they agree to a 2nd call..

    Not all are scum bags just because of cold calling, if everyone here thinks due to cold calling no-one has any sort of wine knowledge, they would also be wrong..

    Its also a bit vague to say "think harder", when asked for ideas, its neither here nor there anyway, once a picture is painted correct or not your fighting against the tide from the off..

    Mr Budd has written completely wrong info about a company I know, theres not the funds to have it removed, so what chance do they have..

    1. Anon. Thanks.

      'Not all are scum bags just because of cold calling, if everyone here thinks due to cold calling no-one has any sort of wine knowledge, they would also be wrong..'

      As far as I'm concerned one of the the fastest and most effective ways that an investment company can destroy its reputation is to cold call.

      I haven't suggested that all cold callers are 'scumbags'. What I am very clear about is that cold calling strangers who have not expressed any interest in wine investment is completely inappropriate and this is in line with the rules of the old FSA regarding cold calls for investment purposes. The second part of your sentence doesn't appear to make sense.

      If I have written 'completely wrong info' about a company I know' then I invite you to send me the details and if I have made a mistake I will correct it.

  17. Apologies, let me be clear in the latter half if the comment..

    previous comments from others are associating cold calling with a certain type of person, perhaps one that has no interest in wine at all, someone who harasses and badgers the older generation and yes whilst that is very likely the case alot of the time, its not the case ALL of the time..

    Jim, if someone has zero knowledge of something, then of course they cant possibly have an interest can they..

    this is why i say a very soft approach on "cold calling" like stated in previous comment, i.e the lead has to accept a brochure/2nd call before a salesman goes anywhere near them..

    perhaps the leads go to a central office run by people within the market like yourself, then distributed to merchants/brokers once receptive to a 2nd call..

    1. Anon. Thanks. It is surely down to the company to establish that they have a solid lead before phoning a potential client. There are far too many people who have been lured into inappropriate investments through an initial cold call.

  18. Jim,

    I think you should pay some attention to Bordeaux Fine Wines. I know you've posted on them previously, but there's a pretty concerning posting on a recent blog which can be found here:

    Someone claiming to be a BFW broker has left a comment "I just left Bordeaux Fine Wines because none of us were paying tax on our earnings and our company bank account just got frozen because most of our clients don't own their wine".

    I was looking at this because I know a gentleman (retired) that has paid around 50% above market value for a range of Bordeaux wines recently, and they've provided him with zero documentation for the purchases.

    I also found Kenneth Gundlach's Twitter page. It's strange that a Director of a Fine Wine Company seems to have such little interest in fine wine and instead prefers to train racehorses - an expensive hobby, particularly for a 29 year old!

    Apparently they're based on Landsdowne Road in Croydon, not quite Portman Square or Wanchai!

    This recent Mirror article doesn't decorate them in glory either, although it does explain why Mr Gundlach can afford to train "20 horses"

    This, in conjunction with their reputation for harassing the elderly (as per blog articles here and elsewhere) is clearly something that must be addressed.

    Your comments would be welcome.

    1. Anon. Thank you your message is timely as I will be posting shortly on Bordeaux Fine Wines and its sole director. I suggest anyone find that their elderly parents have been targeted by this company should be making a complaint through Action Fraud, especially if they have been clearly overcharged.

    2. Just check Duedil for Gundlach's previous companies and experience.

  19. Hello Jim, I notice that Albany Portfolio Management have re-branded themselves as APM Fine Wine Investment. There is also no longer any mention of Albany Vintners on their website and the "in association with Albany Vintners" beneath their logo has been removed.

    As I am sure that many of their investors chose them because of their close link to a merchant, can you confirm that this link has now been severed, and that there is now no longer any business link between Albany Vintners and APM Fine Wine Investment?

    1. Anon. Comment from James Fletcher, a director of APM, clarifying the situation:

      'Thanks for the email. APM is now in its fifth year of operation and is growing rapidly. The management team are introducing a number of initiatives for the benefits of its customers, including new supply and exit routes. Consequently it was no longer considered to be the best solution for APM to remain in association with a single merchant.

      Agreeable terms for a management buy-out of Marcus Edwards’ shares were negotiated, and he has therefore resigned as a director. Needless to say, the exemplary professional and ethical standards adopted at APM will continue.'