Let’s face it, the coronavirus pandemic has fundamentally changed the way we do business. Most of our industry is working from home, learning to balance conference calls and kids with questions that just can’t wait or dogs that must bark while on a Zoom meeting. We’ve all been there and have our moments.
Other things have changed as well, especially when it comes to marketing and advertising. This is especially true for financial advisors who have lost the ability to connect with clients at events, lunches, in office or at home meetings or simple introductions that come from face-to-face interactions. or years, many advisor’s businesses have primarily depended on these methods to connect with current clients and meet new prospects. Social distancing and stay at home orders have eliminated these options for many advisors who are now exploring new options to prospect and connect with people.
So where are they turning? Like everyone else, advisors are turning to technology to increase their online presence with updated profiles while sharing fresh and timely content.
I recently spoke to some of our clients about trends they were seeing regarding their advisor’s marketing and advertising behaviors since social distancing and stay home orders began. One compliance manager told me his firm has seen a 30% increase in advertising submissions as well as a significant increase in the use of approved social media sites like Facebook, LinkedIn and Twitter.
Another client told me, “Advisors have ‘downtime’ and are now thinking a lot about marketing.” I followed up on how things have changed for our client as a result. “Don’t get me started on how much social media usage has jumped since this all began!” They have seen an increase of 25% to 30% in usage and a surge in new accounts being created by their advisors.
Social Media usage is certainly on the rise. A recent survey showed that 32% of Americans said they have increased the amount of time they are using social media sites like Facebook and Twitter.
Another firm told me that advisors who have typically shied away from social media, online profiles, websites, and other marketing technologies are now diving in for the first time. I was told, “Their (advisors) traditional lead generation tools aren’t available anymore. They now have time and are focusing on new ways to build their business.”
Additionally, our clients are seeing a big increase in advertising submissions for recordings from Zoom/online meetings. Advisors are continually seeking guidance on additional options for communicating and marketing to the public.
This all presents an increasing challenge in supervision and compliance, especially when there are growing limitations on human resources.
That’s where our Eagle Eye technology comes in. Eagle Eye helps our clients uncover their advisors’ web presence, locating social media accounts, websites, articles, profiles, videos, OBA’s and more. Eagle Eye creates automated documentation of what has been reviewed, who did the review, and what the website looked like at the time of review, giving our clients and regulators a complete picture of the process. They use our system to discover and “clean up” situations where the use of these sites was done without approvals or monitoring in place.
Another one of our clients shared with us that, “Thanks to Eagle Eye, it is helping me identify and address issues before they are brought to my attention by a regulator.”
With our industry evolving, SiteQuest Compliance is a preferred partner when it comes to internet supervision and website management.
Contact us today for your personalized demo where we can discuss your supervision concerns and see for yourself how Eagle Eye can support your internet supervision requirements.
A securities firm and its chief compliance officer were fined $225,000 by FINRA and required to retain an expert to evaluate and approve its written supervisory procedures (WSPs).
** We would like to note that the actions of this CCO are not the norm. This person committed many willful violations which led to this fine. But, many of the violations were in direct relation to supervision. SiteQuest Compliance provides solutions to CCO in regards to internet and website supervision. That is the primary focus of our article review.
“The NAC found that this securities firm and the CCO violated NASD Rules 3010 and 2110 and FINRA Rule 2010 by failing to establish and maintain an effective supervisory system, including written supervisory procedures (“WSPs”)… The firm then failed to implement a supervisory system to reasonably ensure appropriate review and supervision of the websites.”
NASD Rule 3010 required that FINRA member firms have reasonable supervisory procedures. The CCO in this case was responsible for reviewing and drafting the firm’s WSPs, and the WSPs provided that all advertising would be reviewed for misleading or inaccurate statements and that the firm’s president, would do so. The firm’s WSPs also specified that “all business messages on the internet shall be considered advertising.” And NASD Rule 2210 defined “advertisements” to include “any material . . . that is published, or used in any electronic . . . public media, including any website.” The NAC faulted the CCO for not “identifying” in the WSPs that “websites are advertising to be reviewed”; its rationale for holding the CCO liable when “the firm’s procedures did not specifically state that websites were advertising.” One registered advisor for this securities firm created two non-password-protected, publicly available websites. This firm and the CCO didn’t ensure appropriate review and supervision of these websites as advertising.
In the end, the NEC found that the firm’s failure to supervise the websites violated NASD Rules 3010 and 2110 and FINRA Rule 2010.
Our SQWatcher application would have been a great resource and support for this securities firm. SQWatcher is a web-based solution that TRACKS, MONITORS, and DOCUMENTS your websites assisting with your compliance. With SQWatcher, you have a partner that is built to support your firm, knowing that your required websites are being monitored and archived with tools that will alert you if there is a problem. With an easy to use interface, we will personally support you through the implementation and learning process, continually ongoing to ensure that you and your firm are getting the most out of this industry-leading application.
The NEC stated that “We reiterate here that compliance officers “play a vital role in our regulatory framework. That role in many instances has increased in complexity, and there are circumstances where the role presents difficult challenges. In making determinations about CCO liability, the protection of investors and the public interest are at the forefront of our minds.”
SiteQuest Compliance has over 15 years of industry experience supporting CCOs with their ever changing and increasingly complex job requirements.
Every day, thousands of advisors and advisor websites are being monitored and documented with the aid of our industry-leading compliance and supervision applications. We are proud to be a partner in compliance. We would love to discuss your compliance concerns. Contact us today!
Source: (FINRA Case #2011027666902)
About James Cella
James Cella is the President of a growing and innovative compliance technology provider called SiteQuest Compliance. James is a customer-centric individual and focuses on building and sustaining positive and lasting relationship with his clients and partners. James and his family are "super fans" of University of Utah Football and have attended nearly every home game since 2002. Go Utes!