COMPLYConnect is here! The conference brought together more than 200 industry experts from across the country, all in the name of regulatory compliance education. Yesterday, sessions ranged from the investment adviser marketing rule to the highs and lows of cryptocurrency.
With day one under our belt, we’re sharing some of the top takeaways we heard from our industry-leading speakers.
Top takeaways from day one of COMPLYConnect 2023 about the marketing rule and cryptocurrency
Attendees have already gained some incredibly valuable insight, and we have more in store for them! These are some of the top takeaways from yesterday’s sessions:
1. Everything is marketing.
COMPLY™ Compliance Consultant Kelly Igoe said, “Everything is marketing” during her session about the marketing rule with Mario Chilin, Chief Compliance Officer of EP Wealth Advisors. It’s easy for firms to forget digital assets when they think of their marketing materials. However, in this day in age, marketing materials include much more than printed materials. Marketing materials also include:
- Website copy
- Blog posts
- Social media posts
- Whitepapers
- eBooks
- Sales presentations
- Email campaigns
2. Compliance with the marketing rule might involve collaborating with various departments.
When Chilin said, “My director of marketing and I have become best friends because of this rule,” he elicited laughter from the audience – but that may be true for you, too! Considering the vast number of marketing materials your firm may be responsible for and how detailed the marketing rule is, compliance with the rule might involve collaborating between various departments at your firm, namely compliance and marketing.
3. Marketing materials developed by third-party vendors must also be reviewed.
It’s easy to have tunnel vision when it comes to complying with the marketing rule, but it’s important not to overlook the materials a third-party vendor may provide to your firm. “Even the third-party’s material needs to be reviewed,” Igoe said.
Even if the marketing materials didn’t originate from your firm, your firm could still be held liable if those materials are misleading or deceptive. This is because the SEC considers all communications related to marketing and advertising to fall under the regulation.
4. Even if your firm isn’t using testimonials and endorsements, you still have work to do.
That’s right! Many compliance teams may believe that they’re saving time and energy by not bothering with testimonials and endorsements. However, even so, compliance teams will be expected to “show their work,” so to speak. They will have to include the fact that they don’t use those materials into the policies and procedures of their compliance program, and they must be able to verify and substantiate that they don’t if they are on the receiving end of a regulatory exam or audit.
5. The U.S. is behind with cryptocurrency regulations, and it’s causing a lot of confusion.
“The world has essentially taken this technology and moved forward with it,” said Harrell. He referenced other countries that have not only adopted cryptocurrencies but have also created regulations for how advisers can use them and ensure their clients’ best interest. Harrell added that this has all been done, “before we in the U.S. have a regulation.”
Although regulators have indicated its intentions of creating regulations about cryptocurrencies in the near future, the lack of regulations are just one of the reasons cited for confusion surrounding cryptocurrencies. Other reasons include standardized terminology, rapid development and evolution of cryptocurrencies, confusing and misleading marketing of these cryptocurrencies and lack of experience using and advising on cryptocurrencies.
6. Cryptocurrency will likely become a part of your firm’s offerings in the near future.
During his presentation with Jonte Harrell from ZenLedger, COMPLY’s Director of Compliance Hovig Melkonian said, “Keep in mind, humans dictate the market.” Both informed the audience that despite many advisers’ hesitancy toward adopting cryptocurrencies as a part of their offerings, 80% of advisers have received a question about cryptocurrency. Furthermore, 45% of advisers expect to be using cryptocurrencies over the next two years. Therefore, it’s wise for firms to try to get ahead and start thinking of how they could ensure the best interest of their clients when it comes to cryptocurrencies.
Complying with COMPLY
How can you more proactively meet these heightened risks and regulations? With a trustworthy partner who takes compliance just as seriously as you do! Meet COMPLY.
During last year’s COMPLYConnect, we officially announced the launch of COMPLY, the new parent brand for the ComplySci®, RIA in a Box®, NRS® and illumis® companies. A year later, we’re still supporting compliance professionals and teams with their compliance programs.
COMPLY offers tailored consulting and technology services to help your firm identify and address compliance risks. By utilizing COMPLY’s tools and solutions, your firm can ensure it has a thorough compliance program that complies with applicable regulations and protects clients’ and investors’ trust and your firm’s reputation.
We also offer events like COMPLYConnect to help compliance professionals help their firms comply with confidence. It’s only day one, and attendees have already gained some incredibly valuable insight. Stay tuned to learn more about what comes from day two and three.