By DWN Staff
In digital marketing, advisors must know prospect communication regulations and guidelines. One crucial legal framework is the CAN-SPAM Act, enacted in 2003 to prevent unwanted commercial emails from filling users’ inboxes.
The Digital Wealth News team recently interviewed Teresa Leno, CEO and Founder of Fresh Finance, about what advisors must know about the CAN-SPAM Act.
“As advisors build their contact lists and reach out to prospects, understanding and adhering to CAN-SPAM regulations is vital to avoid non-compliance penalties,” says Leno.
First, the CAN-SPAM Act sets forth several requirements for commercial messages. According to these rules, emails must include an easy way for prospects to opt-out or unsubscribe from mailing lists, be it through links or instructions within the email. The sender is responsible for respecting these requests and immediately removing the recipient from their list.
Leno adds that using email marketing systems that sync to CRM and manage opt-outs is vital to helping ensure compliance. Also, automatic time parameters should be built so that the advisor can’t add an email address that has been unsubscribed for at least three years.
“Another necessary provision of CAN-SPAM involves identification. Advisors contacting prospects must identify themselves, their company, and the nature of their email,” comments Leno.
This means that the email’s contact information, including the “From,” “To,” “Reply-To,” and routing information, must be accurate and not misleading. Misrepresentation could lead to harsh penalties, including fines and even imprisonment.
Moreover, the email’s subject line must accurately reflect the content of the message, providing recipients with a clear idea of what they can expect when they open the email. The use of deceptive subject lines to encourage opens is strictly forbidden under the CAN-SPAM Act.
Leno adds, “It’s also essential to note that CAN-SPAM applies to all commercial messages, whether sent to individual consumers or businesses. There’s no gray area here—any electronic email message, the primary purpose is advertising or promoting a service, such as financial planning, including content on a website operated for a commercial purpose, falls squarely under the regulation.”
Advisors should also consider the law’s requirement for advertising disclosure when reaching out to prospects. Emails must clearly state that they are an advertisement or solicitation. The location of this disclosure does not matter as long as it is clear and conspicuous.
Lastly, advisors must remember that the CAN-SPAM Act has strict penalties for noncompliance. Violating the Act can result in fines of up to $51,744 per email, violating the law.
The CAN-SPAM Act provides a legal framework regulating commercial email sending. Advisors must familiarize themselves with its provisions and adhere to them while contacting prospects. Understanding CAN-SPAM is necessary to stay on the right side of the law, improve professional credibility, and foster trust among potential clients. A compliance-focused approach to email marketing will most likely ensure that advisors can effectively connect with prospects without failing to comply with the CAN-SPAM Act.
Teresa Leno worked as a financial advisor and experienced firsthand the importance of financial education to help clients make more informed decisions before a crisis. Through her experience, Fresh Finance was started as a financial content marketing solution to help advisors validate their expertise through sharing content.
