“The future of advertising is the Internet.” - Bill Gates
How true these words are. Today, it's virtually impossible to run a credible business without an internet presence. Consumers look to the Internet to educate themselves, to search for the products and services they need, and, – yes – sometimes to verify that your firm exists online and is trust-worthy. Any firm that doesn’t utilize website advertising is at a distinct disadvantage from their competitors.
Your branded company website, when used correctly, is a powerful tool for educating consumers and driving business to your door. Consumers may come to you better informed about what they need and how you can help them. You can also use a variety of digital platforms and strategies to drive more traffic to your website and expand your reach.
However, online advertising doesn’t come without some inherent risks. Regulators at both the state and federal levels expect financial services advertising to be fair, accurate, and not misleading, and they regularly enforce their respective advertising regulations.
Polish poet, Stanislaw Jerzy Lec, once said, “Telling lies does not work in advertising.” While this seems obvious, it isn’t always easy to comply with the various advertising regulations. What may seem factual to you could be considered misleading to a consumer – or a regulator. Online advertising is highly visible and easy for regulators to find, so it’s crucial that you understand how to use it to your benefit without exposing yourself to unnecessary regulatory scrutiny.
Here are 7 key things to keep in mind with your online branding and advertising:
- Identify yourself: A consumer should know by looking at your website what products and services you offer. If you provide insurance and annuity products, say it. Don’t disguise your role by using vague titles or product descriptions. In addition to being clear about the products and services you offer to fulfill your clients’ needs, consider adding a prominent disclosure in the footer of each web page that reads, for example, “Insurance and annuity products and services offered through [XYZ Company Name]”.
Some states have specific requirements for how you identify yourself, including specific titles you must use (in Florida, for example), and listing your insurance license number on the site (Arkansas, California and Texas).
- Use appropriate titles: Ensure you use a title that accurately reflects your role and the licenses and registrations you hold. For example, unless you are properly registered as an investment adviser, do not use titles such as “advisor” or “planner”. These are prohibited under state and federal advertising regulations. If you are a fixed insurance agent, consider titles such as “Insurance Professional” or “Insurance and Retirement Professional.”
- Correctly describe your services: If you are a fixed insurance professional, avoid presenting yourself as providing wealth management, investment management, estate planning, or tax planning services. These activities generally require additional securities registrations and/or the services of a qualified tax or legal representative. In addition, don’t suggest or imply that you have an affiliation with a governmental agency, such as the Social Security Administration.
- Position financial products correctly: Insurance and annuity products are designed for protection and income purposes and can be part of a solid retirement foundation. They are not considered a “retirement plan” or “program”, they are part of the larger strategy when used properly – and they are not right for everyone.
Review the product marketing materials developed by the carriers you represent as a guide to help you correctly position these products.
- Include the Pros AND the Cons: Consumers generally know that there’s no free lunch. If something sounds too good to be true, it probably is. The products you provide offer tremendous financial value, so don’t be afraid to explain how they work, including the potential trade-offs. Be sure that the description of your products and services is complete and accurate.
For example, if you promote the guarantees in a fixed product, include a statement that explains what the guarantees are based on (i.e., the claims-paying ability of the issuing company). Consumers should understand that insurance products are not FDIC-insured or completely safe from any and all risk.
When discussing optional riders or benefits, disclose the annual added cost for them (if applicable). If the consumer has to meet certain terms and conditions to realize the full benefit of the feature, explain this clearly.
- Avoid misleading language or scare tactics: Certain terms and phrases are often considered regulatory hot buttons when used to promote fixed insurance products, so they should be used cautiously – if at all. Some examples include:
- Safe, secure, security
- Peace of mind
- Gains, yield, returns, earnings
- Market participation
- Hybrid annuity
- CD-like, CD-annuity
- Private pension, pension-like
- Expert, Specialist
- Devastate, critical, wipe out, decimate (these are considered scare tactics!)
- Let people find you! Be sure to include a physical address and a phone number – and ideally an email address, too. Consumers need the assurance that you are part of their community and that they can reach you if needed.
This list is not exhaustive, but it’s a good start. There are numerous advertising standards to be aware of and to follow, so be sure to seek qualified assistance to review your website – and all other – advertising.
Learn more about how to stay compliant with our Compliance Guide. Click the button below to get your own copy.