By Teresa Leno, CEO and Founder of Fresh Finance
Advisors seeking to grow their book of business often use lead-gen campaigns in the wealth industry. While many sources of prospect email lists and lead-gen services exist, advisors must understand 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.
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. Here are some crucial tips for advisors reaching out to prospects through email.
Unsubscribing must be accessible and easy.
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.
If you send an email without a method for opting out, you must include a paragraph stating that they can reply “Opt-out” or “please remove me” and that you will not contact them again.
CRMs can help manage opt-outs.
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.
You must identify yourself and the reason for the email.
Another necessary provision of CAN-SPAM involves identification. Advisors contacting prospects must identify themselves, their company, and the nature of their email.
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.
The subject line must reflect the message’s content.
Moreover, the email’s subject line must accurately reflect the content of the message, providing recipients with a clear idea of what to expect when they open the email. Under the CAN-SPAM Act, the use of deceptive subject lines to encourage opens is strictly forbidden.
CAN-SPAM applies to all commercial messages, whether sent to individual consumers or businesses. There’s no gray area here—any electronic email message whose 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 advertisements or solicitations. The location of this disclosure does not matter as long as it is clear and conspicuous.
There are strict CAN-SPAM violation penalties.
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 prospect email marketing can help 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.
