Ensuring marketing compliance is as important as ever in today’s highly-regulated world, especially for those in the financial services industry. You must meet all regulatory and consumer protection obligations, or be faced with big penalties—from both a monetary and reputational standpoint.
While regulations seem to be ever-changing and evolving, here are 11 best practices for marketing and regulatory compliance that you can implement within your organization right now to help manage risk and optimize your compliance program.
Have a Dedicated Compliance Officer
A financial organization must have a compliance officer to make sure all disclosures are sent out on time and if necessary returned and kept on file, and to make sure the organization is in compliance with any state or federal laws related to any financial advertising in print or electronic form.- David Reischer, Attorney & CEO, LegalAdvice.com
Have a Compliance Checklist
Have a checklist of what you can and can't say in marketing materials to avoid setting false expectations. While all materials should be run by the compliance team, having a checklist can streamline the approval process by ensuring that everything created by marketing will pass the audit.- Catherine Way, Marketing Manager, Prime Plus Mortgages
Create the Right Environment
Many regulated companies are "reactive," meaning that they do not anticipate issues but wait for issues to arise and then act or "react." Many of these companies are short-sighted, looking at the near-term and not focused on long-term goals. "Proactive" organizations are forward-looking, not only in anticipating issues that might arise but in having clear directions and goals.
The compliance staff has the best chance of being successful in a proactive organization, where the culture is open to change and forward-thinking. Success in a reactive organization, by contrast, is an uphill battle. These organizations are likely resistant to change, lacking or minimizing proper training, and also likely have no real sense of management buy-in.- Braden Perry, Partner/Attorney, Kennyhertz Perry LLC
Get Top-Down Management Buy-In
The commitment of senior management and the effectiveness and tone of their communication to their staff is pivotal to the success of the compliance program. This commitment is shown when management changes their vision and strategic goals and provides the compliance department with authority to implement, communicate, and improve the compliance policies and procedures.- Braden Perry, Partner/Attorney, Kennyhertz Perry LLC
Don’t Make Any Claims About Being The “Best”
Everybody's lifestyle and financial needs are different. Making blanket claims that one product or service is superior to another is not accurate, and can be misleading and deceptive.- Ty Stewart, CEO & President of Simple Life Insure
Don’t Oversimplify The Application Process
Basically, in your attempt to make the application process seem as easy and stress-free as possible, you may make misleading qualification promises.- Ty Stewart, CEO & President of Simple Life Insure
Practice Due Diligence Before Signing with a Vendor or Partner
Validate vendors to confirm they are CFPB-compliant before entering any transaction. Look into the vendor's policies and scrutinize them to make sure they’re a good fit for your organization and aren’t going to pose any unnecessary risk. You should even consider tapping into a legal defense team for due diligence, especially when it comes to the sale and purchase of financial services.- Michael Hammelburger, CEO, Expense Reduction Group
Hold Internal Compliance Training
Educating staff with regard to compliance through training and internal communication practices will help ensure that the entire organization is on the same page.- Michael Hammelburger, CEO, Expense Reduction Group
If You Wouldn’t Say It In Front Of a Client, Don’t Put It In Your Marketing
A great rule of thumb: if you wouldn't say it in front of a prospective client with the whole world watching, don't put it in your marketing. Obviously, you need to include the disclaimers and other regulatory obligations, but having this in the back of your mind will help you make good decisions.- James Pollard, Founder, The Advisor Coach
Don't allow biases or alliances shape the way you implement or monitor the compliance program. Playing favorites or turning your back on certain practices erodes the respect within the organization. If you treat the policy consistently, with a proactive sense of purpose, and monitor and maintain the compliance culture, you will put yourself in the best position to be successful.- Braden Perry, Partner/Attorney, Kennyhertz Perry LLC
Respond to Consumer Complaints
Monitoring and responding to each consumer complaint in a timely manner prevents having the customer experience being aggravated.