Salespeople are smart. They?re creative. And they?re driven, which sometimes translates into their being impatient. From a compliance perspective, this can help to create the perfect storm.
For financial advisors, this storm develops when they want to develop their own sales and marketing brochures, letters, ads and other materials. ?When you create new things, they have to go through the compliance-review process,? explains Tracy DeWald, senior vice president and general counsel for Securities America Inc., an Omaha-Neb.-based broker-dealer. Depending on the complexity, that can take time.? He has some advice for these creative types.
First, consider whether your ?new idea? might have already been thought of?and approved. ?If they would just call their firm, insurer or mutual fund company and explain the approach, they might find there?s already something that could be co-branded or pulled off the shelf that accomplishes most of what they want to do,? he says.
Katherine Vessennes, J.D., CFP, RFC, president of Vestment Advisors in Chanhassen, Minn., endorses the idea of not reinventing the wheel?or the brochure. ?Seeing what your broker-dealer has already approved is a big help,? she says. She warns advisors to choose their words carefully in promotional materials. ?There are certain terms that, if you can avoid talking about them in ads, will make your life easier,? she explains. ?Mutual funds,? ?variable annuities? and ?VULs? are among those words.
DeWald likewise encourages advisors to keep it simple. ?I tell reps if they don?t talk about ?X,? then I don?t have to file this with the NASD, and they don?t have to worry about the extra, time-consuming steps that filing involves,? he explains. Given the complexity of products, that?s not always easy.
He also discourages advisors from trying to sell products via brochures. ?There?s a tendency to want to use a letter or brochure to sell something,? he explains. This generally calls for lots of details, and the more details a promotional piece contains, the more scrutiny it will face. That means delays. Instead, he suggests that advisors talk about themselves, saying something like, ?I believe in a balanced investment approach for my clients.?
In those cases in which it makes sense to create new materials, advisors would do well to heed Mike Sommers? advice: Plan ahead. ?If you?re not able to use something that already exists, make sure you give your broker-dealer enough time for a review,? adds Sommers, ChFC, CLU, Hummel Group?s CEO, and an Ohio National general agent. ?If you plan ahead, the process will be more efficient.?Dave Willis is a regular contributor to Advisor Today.