When it comes to advertising, processes, procedures, and disclosure matter. Not everyone in a firm will understand the importance of the “details” in regard to the various pieces to advertising, and in particular performance advertising. Don’t be afraid to question processes that are outside your responsibilities and stand up for ensuring your firm is putting out the best and most compliant marketing pieces possible.
Those were the key takeaways of “Can You Really Say That? Marketing Dos and Don’ts in a Digital World,” a pre-conference workshop held at the recent Ascendant/CSS conference in San Diego.
Each esteemed member of the panel discussion focused on various themes:
- Amy Jones, Principal, Guardian Performance Solutions LLC – The newly proposed GIPS 2020 standards should be welcomed by the industry as it’s an attempt to make the GIPS standards more relevant for various types of firms. They’ll be more relevant and targeted, resulting in firms being able to focus their efforts and hopefully not have to spend more time on complying with the standards.
- Rick Marshall, Partner, Katten Muchin Rosenman – With the advent of artificial intelligence and automated trading systems like robo-advisers, the possible mistakes can be much quicker and far-reaching than when performed by humans. And when things go wrong, there’s often the question of disclosures, disclaimers, and ultimately, who’s to blame. As such, firms should be keeping an eye out for red flags, and developing methods for identifying them. Compliance professionals aren’t expected to be experts, but there is an expectation that they surround themselves with experts.
- Jack O’Brien, Partner – Morgan, Lewis & Bockius LLP – Social media continues to be a large area of risk as it’s a moving target in terms of platforms and number of users. Approximately 85% of firms use social media, and 80-90% have reported positive experiences from it. Because the platforms are constantly evolving and the features continually changing, firms should ensure that training isn’t just once a year, but periodically highlighted. Additionally, policies and procedures should be kept simple, ideally limited to one page to increase the likelihood that employees will actually read and understand.
- Dan Haynes, Consultant, Ascendant Compliance Management – Marketing and advertising is very broadly defined under the general anti-fraud rule in the Advisers Act. Firms should really focus on what the purpose of the communication is; if it’s to secure new business or keep current business, it’s likely advertising. Also, when in doubt, firms should treat the piece as advertising! The biggest key to staying out of trouble with marketing is to have a strong process in place. Ensuring there’s one person/group that’s in charge of reviewing, documenting such reviews, and providing education to the entire firm will help bolster an adviser’s Compliance Program.
Compliance officers simply cannot be experts in every area of the firm. Aside from surrounding yourself with very knowledgeable people, compliance officers should learn to ask questions. Don’t just rely on someone else to create/review performance advertising materials, but question the data. You don’t have to have all the answers, but being inquisitive will help uncover potential red flags and head off problems down the road.
To register for our upcoming spring 2019 conference in Miami, click here.
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