Tag Archive for: compliance

Marketer’s perspective on investment marketing compliance

My colleagues in investment marketing and writing roles were generous with their feedback on my draft of “6 tips to keep your compliance officers happy.” One of them wrote a reply that stands on its own. I’m happy that I received permission from that marketer to publish that reply. It’s anonymous to avoid the step of going through compliance review.

A marketer’s perspective on investment marketing compliance

Here are a few reactions to your post from the perspective of a marketer, which is somewhat broader than that of a writer.

Respect matters

Your post makes several valid suggestions about building a strong relationship. To me the most important one is about mutual respect.

Because Compliance and Marketing have different jobs to do, their work can seem to be at cross purposes. Compliance’s job is to protect the firm, to keep it out of trouble. While Compliance may strive to stay under the radar, that is the opposite of what a marketer does. A marketer’s job is to call attention, which by definition requires doing something different, being unlike the others.

You and I, and the readers of your blog, are likely familiar with situations when the relationship has devolved—Compliance complains of Marketing trying to get away with something while Marketing blames its ineffectiveness on the clichéd “Sales Prevention Department.” This reflects laziness on the part of both.

What works is when Compliance and Marketing each brings their best. I like the idea of trusting Compliance to include them early in a new initiative, and it’s a beautiful thing when, consulted early, Compliance can collaborate and provide insight beyond the line editing of copy. This assumes that Compliance recognizes Marketing as being thoughtful, prepared, and generally aware of the guardrails (what you detail in your post)—and yet still capable of original thought.

Paths of junior marketers

I’ve seen junior marketers go a few directions after being introduced to the rigors of Compliance review:

  • There are those who rebel. They won’t work for an asset manager long.
  • At the other end of the spectrum: Those who offer no fight, they can’t and won’t defend how they’ve presented something. They roll over and the result is the marketing communications are written by Compliance officers.
  • Then, weirdly, there are those who take it upon themselves to become so proficient in the rules that they become quasi-Compliance experts themselves. Over time, their work becomes bland, colorless and designed to do little more than breeze through Compliance review.

None of the above leads to effective marketing, in my opinion.

Be effective marketers

There’s no question who has the power in the Compliance/Marketing dynamic, but I like to see the marketers who find a way to work with Compliance while resisting the urge to capitulate.

We focus on Compliance because they’re who controls whether our communications get out the door. But let’s not mistake them as the client. Compliance’s concern is the regulators, and we all accept that as their role. (In fact, years ago an academic study found that regulated businesses overall think the regulator is their customer.)

But while a clean FINRA letter is important, it’s not the only hurdle an asset management marketer needs to clear—there’s the ongoing need to attract attention, to persuade, to convert clients and prospects. Marketing still needs to do marketing, which requires a certain stamina that extends even beyond the Compliance relationship-nurturing you describe in your post.

6 tips to keep your compliance officers happy

How can I work with my firm’s compliance officers?

That was the most frequent question I heard when I spoke on “How to Write Investment Commentary People Will Read” to the CFA Society Atlanta earlier this year. At the time, I could only answer verbally and suggest that the questioners flip the perspective of my post on “7 ways Compliance can work with investment writers for their mutual success.” That’s why, in this post, I focus on how marketers and advisors can build constructive working relationships with the compliance professionals at their firms.

I’ll focus on investment marketing compliance in this post. However, if you’re a financial advisor, you can tweak my suggestions to fit your situation.

1. Create a compliance checklist

Checklists are a great tool for the writing process, as I’ve discussed in “5 proofreading tips for quarterly investment reports,” “Investment commentary numbers: How to get them right,” and Financial Blogging, which includes several checklists. They help with compliance requirements, too.

If you’ve been submitting pieces for compliance approval for a while, you probably have an idea of what triggers a negative reaction. For example:

  • Promissory language—I know you won’t guarantee results, but compliance officers are sensitive to gradations of language. List examples of what sets them off, as well as the language that they offer as solutions. Here are some examples provided by financial writer Susan Trammell: (red flag) The fund enables you to invest in high-quality convertibles vs. the fund offers the opportunity to invest in high-quality convertibles; (red flag) growth stocks have routinely outperformed value stocks over the past decade vs. growth stocks have historically outperformed value stocks over the past decade; (red flag) robo investing will transform the investment landscape vs. robo investing is likely to transform the investment landscape; (red flag) populist sentiment will hammer the FANG stocks vs. populist sentiment could put the brakes on high-flying social media companies.
  • Mentions of specific investments, especially specific products, and their performance—You may wish to avoid mentioning specific investments unless absolutely necessary. These topics typically require disclosures. Especially for mutual funds, the disclosures can be long and require quarterly updating. Instead, as Susan Trammell suggests, “find a way to help your audience understand your meaning without mentioning brands. For example, you might refer to the leading smartphone innovators, the largest online retailers, cash-strapped clean energy car manufacturers, or pioneering ride-hailing companies. Your readers will figure it out.”
  • Cherry-picking—For example, compliance doesn’t want you to discuss only your stock picks that are doing well, or to vary the periods of performance (or the benchmarks) in your quarterly performance tables to show only those that are favorable to your firm’s performance. Familiarity with the CFA Institute’s Global Investment Performance Standards (GIPS®) can help you to get compliance on your side. (The CFA Institute offers an annual educational GIPS conference. The 2019 GIPS conference will be held Sept. 11–12 in Scottsdale, Arizona.)
  • Testimonials—These are forbidden to investment professionals who are regulated by the SEC. Susan Trammell suggests some workarounds, saying “You might point out that most of your new customers come from client referrals, that you have many second- and even third-generation investors, or that the average tenure of your client relationship is so many years. Just be honest with your stats, and be sure to have the data to support them!”

On the positive side, you can list the rules and language that satisfy compliance requirements. For example:

  • Nonpromissory language—Sometimes referred to as “weasel words” because they sap the strength of your statements, these phrases are necessary to avoid misleading clients. They include phrases such as “we believe,” “I think,” “it appears,” and “historically” (in phrases such as “Historically, small-cap stocks have outperformed large-cap stocks over the long run”).
  • Disclosures—Some boilerplate disclosures can be used as is, regardless of when your writing is distributed. Others, such as assets under management and performance, must be updated quarterly. You may find it useful to keep the text for unchanging disclosures in your checklist so you can simply copy-paste it. For more complex, changeable disclosures, make a note of the source you’ll contact for current information. As a complement to your checklist, you can save fixed disclosures and placeholders for period-specific data elements in your document templates.
  • Documentation—Develop a sense of the kind of facts for which you’ll need to provide backup. You may need to footnote the information. Or, it may be enough to have the source documented in case the regulators have questions. In my days on the staff of a large asset manager, I filled file cabinets with documentation. I imagine that most of this information is saved electronically these days. Make sure you know how to retrieve the information.
  • Information that helps you be accurate—As I discussed in “Investment commentary numbers: How to get them right,” when you’re not accurate, you undermine your credibility, embarrass yourself, and upset your compliance department. Your compliance officers appreciate accuracy.

Your checklist can note the guidelines for proper sourcing of exhibits. You can also remind yourself to check that you’re referring to the current quarter in your commentary. This is especially important if you start your draft by updating the previous quarter’s commentary. On a related note, observe your firm’s style guidelines—if they exist—(or create your own style guidelines).

In addition to helping you with compliance, a checklist can ease your workload. For example, if you’re a busy portfolio manager, you can ask your assistant to review your draft against the checklist. Even if you’re working alone, it’s less taxing to check a list than to try to recall the important guidelines on your own. Checklists lessen the load on your brain.

A good way to expand your list—and help your colleagues—is to ask them for their input. They may know nuances that you don’t. In addition, by sharing your checklist with them, you may save them from mistakes that will slow compliance approval of their writing.

2. Meet with a compliance officer

One way to build a partnership with your compliance officer is to schedule a meeting to discuss guidelines for the kind of pieces that you write most regularly. Do this when there is no pressing deadline or quarter-end crunch in the way. I think they’ll be willing to spend this quality time with you. Your compliance officer wants you to succeed at your job. After all, your marketing and client retention efforts help to pay their salary.

What can you discuss with them? If you’ve completed your compliance checklist, you can share it with the compliance officer (consider sending it in advance). You can tell them the rules and guidelines you seek to follow and ask them if there are others they want to include.

Learn how your compliance officers want to work with you. For example, do they prefer to see a first draft in some cases, but the final draft in others? It’s also important to ask what kind of lead time compliance needs to review your writing. In addition, are there steps you can take to make it easier to review your work and to speed up review when necessary? You can also ask them about my suggestion #3.

A colleague says:

I’m a huge proponent of building a relationship with compliance. Depending on how the firm is set up, compliance officers generally interpret the law and consult with the firm’s attorneys. Compliance officers who trust and respect you can act as an advocate. Treat them poorly and see what happens. They hold all the cards.

The same colleague suggests that you meet first with compliance, and then compile your checklist. I can see how that might be ideal. However, access to compliance isn’t always easy, especially if you’re a junior employee. There’s a lot that you can figure out on your own, especially as you see how compliance responds to your content.

3. Ask for training in marketing compliance

If you work for a large firm, your employer may have training available for you, possibly as part of its ethics training. When I was an “access person” as a contractor for a large U.S. investment manager, I had to take annual computerized training that touched on marketing topics.

If your firm lacks a prepared training program, you can still ask your compliance officer to gather the relevant employees for a discussion of compliance. Alternatively, you can suggest hiring an industry compliance consultant to come on-site to conduct a marketing compliance training session. Some can even use your firm’s own materials in their presentation, as NRS did for a colleague. It will probably help if you identify your topics of interest in advance. Your firm’s compliance professional will probably have ideas of their own.

Perhaps the trainer can show a before-and-after version of a marketing piece, explaining why changes were made to satisfy compliance. In my earlier post on marketing compliance, I suggested that compliance officers create a three-column table consisting of

  1. Example
  2. What’s wrong with the example—and why
  3. A rewritten example that works—and why

While this might be too much for a PowerPoint slide, it could be great as a reference guide that reinforces in-person training.

4. Identify useful resources

You probably don’t want to read SEC documents. However, compliance experts’ interpretations of the regulators’ words can be more useful. Some compliance consultants have newsletters and blogs that may touch on marketing issues. When you google a topic, you’ll often find reputable firms offering understandable articles on rules and regulations.

5. Treat compliance with respect

Try to work within the process that compliance prefers. If you treat compliance preferences respectfully, you’re more likely to receive cooperation when you’re in a rush or need to push back on a suggestion from a compliance professional.

Respect involves being mindful of the demands on the time of compliance professionals. As a colleague says, “They typically have dozens of items to review, so anything you can do to make it easier on them would be appreciated.” This colleague suggests, for example,

Once you get guidance on a piece, share it with your colleagues so that they can incorporate it in their own work. This saves the compliance reviewer from having to make the same comments on pieces coming from different people, and it makes the writers more efficient at the same time.

For my part, I suggest that you don’t ask for rush processing if it’s not necessary.

By the way, if you’re an investment professional or advisor feeling annoyed by compliance, a colleague says that you should remember that your “licenses and livelihoods are at stake.” The stakes are high.

6. Don’t fear compliance

Respecting compliance doesn’t mean that you should fear it.

For example, although respect is important, it doesn’t mean that you never question changes made by compliance. In my experience, sometimes compliance makes changes to improve style, rather than to improve the text’s compliance. Sometimes those are great stylistic improvements. When they’re not, you can ask, “Is this a style recommendation, not a change that’s required for compliance?”

A colleague agrees that you can negotiate changes with your firm’s compliance professionals, saying:

They normally are open to other wording. Changes they suggest may be the first or safest thing that comes to mind, but not necessarily the final answer. Work something out over the phone, not always by email. Compliance understands that you’re trying to market yourself or company and they normally want to help you do so, but in a compliant way.

That’s a good point about getting on the phone instead of relying on an email, in which nuances can be lost. It’s easier to discuss several alternatives in a live conversation. Also, a phone call may cut through the clutter in the compliance professional’s inbox. When I held a staff job, I’d sometimes walk to the compliance head’s office to make my questions harder to ignore. However, again, use this kind of “ambush” tactic with moderation. Being respectful, and even friendly, can go a long way to improve your relationship with compliance professionals.

Also, you can use the information in “Ammo for your plain-language battle with compliance” to battle against a compliance officer who prefers clunky formal language.

Another colleague urges writers to take a positive attitude toward compliance, saying:

I’ve once again been informed that “our compliance department is the most conservative in the industry”—it’s almost comical. Over and over again, I meet marketers and sales teams who believe that the securities laws are antiquated and that compliance is trying to keep them from being successful. The approach often taken is “we’ll hide it from them until the last minute and then they’ll have to approve it, or maybe we’ll get lucky since ‘they’ all say different things.”

I agree that you shouldn’t wait until the last minute to consult compliance. The results could derail your marketing.

Keep on learning!

As you evolve as a writer, you’re likely to encounter new challenges—and successes—in writing within the confines of compliance constraints. Keep on learning and documenting your lessons in your checklist.

As you learn more, you may wish to break one checklist into multiple lists to prevent it from becoming unwieldy. For example, you might create a specialized checklist for a specific kind of document.

Speaking of learning, I’d like to thank the colleagues who gave me feedback on this blog post. As I expected, they prefer anonymity, which I suspect is partly to keep them in the clear on compliance rules and rules about speaking on the record.

Are you crediting your OECD data properly?

You can’t simply grab data for use in your white papers, articles, and blog posts. You may not have the right to use as much of the information as you like, as I’ve explained in “Legal danger for financial bloggers: Two misconceptions, three resources, one suggestion.” Assuming it’s okay to use the data, you need to give the proper credit for it. Some data providers ask for more than others, as I discovered when I looked at the website of the Organisation for Economic Co-operation and Development (OECD). OECD data is often cited in white papers of investment and wealth management firms.

In this post, I describe some steps you can take to use OECD data according to its guidelines. Please check directly with the organization if you have questions. They’re the authority on the use of their data.

1. Check to see if you need permission

Below is what I found on the OECD website about using its data:

You can copy, download or print content for your own use, and you can also include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. You should cite the Title of the material, © OECD, publication year (if available) and page number or URL (uniform resource locator) as applicable.

All requests for commercial use and translation rights should be submitted to rights@oecd.org.

This description is vague enough that I wondered if you can use OECD data in a white paper without paying a fee. After all, white papers seems like commercial use to me. I found a pretty broad definition of commercial use on TheHelpful.com. My philosophy about using copyrighted data is “When in doubt, ask for permission.” I emailed the OECD to ask if it’s okay to use its data in a white paper with attribution.

2. Work within the OECD’s constraints

Here’s the part of the reply I received from an individual in the OECD’s rights area.

Thank you for your message. There are no objections concerning the reproduction of OECD data (values) to create your own graphs/tables/charts provided that suitable acknowledgment of OECD as source and copyright owner is given. The material should be cited as follows : Based on data from OECD, title of the dataset, title of the database, friendly url, date of access

It seems as if you are free to cite some data in your text and even to create your own graphs, tables, and charts using the OECD’s data. Make sure those exhibits are truly your own. You can’t simply reproduce OECD exhibits.

Make sure you give proper credit in your exhibits based on OECD data. I’m guessing that the OECD’s preferred citation, “Based on data from OECD, title of the dataset, title of the database, friendly url, date of access,” goes into more detail than many writers commonly provide. However, you probably should have those details available anyhow to keep your firm’s compliance professionals happy.

3. Contact the OECD if you seek to reproduce materials or make commercial use

Found a great OECD graph, chart, or document that you’d like to reproduce? Play it safe by  contacting the OECD for permission. Here’s what the OECD told me about rights requests.

Should you wish to use OECD data/reproduce OECD published material for commercial purposes, please send us more information about your intended use by completing the following form:

About the OECD material you want to reproduce:
Full title:
Publication date:
Internet address (if applicable):
Exact pages / charts / data to be reproduced:
Will you translate the material? If yes, into which language?

About you:
Full address:

About your work:
Number of pages*:
Planned publication date :
Publisher’s name, address:
Print Run*:
Public Price*:
If published online:
Number of subscribers*:
Price of the subscription*:

* even if approximate

Comments (if any):


Stay safe by following the rules when you cite other people’s data! Contact the OECD if you have any questions.

Image courtesy of adamr at FreeDigitalPhotos.net

Top 3 Compliance Concerns When Writing Your Blog

Compliance expert Cindi Hill very kindly reviewed the compliance section of my Financial Blogging book from the perspective of a registered investment advisor (RIA). I’m delighted to share her guest post on compliance and your blog. It seems to me that most of her advice also applies to other forms of advisor writing that might be considered marketing or advertising.

Top 3 Compliance Concerns When Writing Your Blog

By Cindi R. Hill

Let’s explore the compliance side of writing your blog. What are the things you should avoid or be concerned about when planning what you will write in your blog?

1. Understand who will need to review your blog

Is it simply the chief compliance officer or will your blog post need to go through a complete review cycle? How much lead time is needed for the review? If you have something that includes breaking news, you don’t want it tied up in review for days. In some states, like Idaho, all advertising items are required to be reviewed and approved by the state prior to being published.

2. Learn the guidelines for discussing performance

If you discuss investment performance, you need to follow guidelines. There are disclosures that may be required as part of your blog footer, the text that runs immediately under the body of each post. Which guidelines and disclosures depends on if you are registered with the SEC, your state, or FINRA. Be aware of these before you start to write.

3. Use words carefully

When reviewing any advertising/marketing piece I look at the words used. Some I discourage from use are “no bias” or “no conflicts of interest.” Just because you are a fee-only advisor does not mean that you have no biases.

This leads me to other types of words you should avoid, starting with definitive descriptors like “all” or “will.” Use “may” when you are tempted to use “will.” On a similar note, the word “exact” in a blog will get my immediate attention.

Another type of word I suggest staying away from—adjectives. For example, “excellent” or “superior” when referring to returns. This may seem obvious, but I have had to remove them from a reviewed document in the past. Also “highly” as in highly experienced. Or another one: “ultra-low cost.” You get the picture.

Remember that your blog is an advertisement. Compliance around any advertisement applies to your blog. No testimonials. This prohibition appears to apply to non-investment advisory activities as well.

Cindi R. Hill, CFP®, IACCPTM of Hill Compliance Advisors provides comprehensive compliance services and solutions for the financial professional who is a Registered Financial Advisor (RIA). You can follow her blog at https://hilladvisors.wordpress.com.

Ammo for your plain-language battle with compliance

“Our compliance officer makes us write like this.” That’s the complaint I sometimes hear when I push financial professionals to write better. If you’d like to push back, consider the point made by Joseph Kimble in Writing for Dollars, Writing to Please: The case for plain language in business, government, and law. Kimble is a lawyer who has taught legal writing for 30 years at Thomas Cooley Law School.

Lawyers and compliance professionals say that legal jargon is necessary to protect your firm. However, Kimble suggests that jargon may be part of the problem. How’s that? Readers often fail to understand legalese and other jargon. As Kimble says, “…this in turn will be more likely to engender disputes and litigation that never should have happened in the first place.” This makes me think of some of my pet peeves, such as the use of “mitigate.

Plain language can be a lawyer’s friend. “If anything, plain language is more precise than traditional legal and official writing because it uncovers the ambiguities and gaps and errors that traditional style, with all its excesses, tends to hide,” says Kimble. I agree.

However, even when compliance professionals let writers use plain language in the body of a communication, they may insist on technical terms in the disclosures as a form of protection for the company. Kimble’s book suggests that technical terms are a small part of legal documents—and that would presumably include documents governed by FINRA and the SEC. Those bodies may require certain information, but they don’t normally require specific wording. Rather, legalese just gets copied from old forms and models. In fact, the SEC favors plain language. Kimble mentions the SEC’s plain-English rules and Plain English Handbook as one of the “historical highlights” of the plain language movement.

If you’re looking for evidence of the benefits of plain language, 60+ pages of Kimble’s book are devoted to evidence of how plain language is “saving time and money” as well as “pleasing and persuading readers.” His book is among the sources I mention in “Seven Ways to Talk Your Financial Execs Out of Jargon and Bad Writing” on the MarketingProfs blog.


Disclosure: I received a free copy of this book after mentioning it in another blog post. If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.