The Five Things Financial & Insurance Advisors Should Do to Stay CASL Compliant

by Jonathan Bega

If you’ve been following the news, you may have heard something here or there about the new CASL regulations that rolled out about four weeks ago on July 1st. While CASL has been around since July 1st, 2014, the new regulations have definitely changed the situation quite a bit and, as a financial advisor, you need to know what that means for your business. This is especially true because much of the new CASL regulations are incredibly draconian in their punishments to small business owners. As such, I’ve decided to put together a brief article on the basics of CASL, what the changes mean, and some tips you should follow to adhere to it.

The Basics

To get started, CASL stands for Canada’s Anti-Spam Legislation. The purpose of this legislation is to reduce the ability of businesses to spam individuals. Primarily, the legislation deals with “commercial electronic messages,” which includes email, instant messaging, or other messaging technologies. First going into effect on July 1st, 2014, there was a three year transition period that just ended last month on July 1st, 2017.

Prior to 2017, only the regulatory bodies could sue corporations. There had been a handful of cases in Court, but they had primarily focused on egregious offenders. Large corporations and email networks responsible for huge amounts of spam messages. As part of the transition, however, this has changed. Today, any individual who feels like he or she has been spammed by a CASL-violating message has the right to launch a legal action. In other words, you send someone a message and they can try to generate a payday on your behalf. Talk about strange incentives. Moreover, if you are found guilty of sending unsolicited commercial electronic messages, judges can award up to $200 per day for each violated message sent, for up to a maximum of $1,000,000 / day!

Yikes! Even worse, for those of you running a business, CASL imposes personal liability on officers and directors of a corporation if they “directed, authorized, assented to, acquiesced in or participated in the violation,” even if no lawsuit against the corporation is started. That is, as a director / officer, you could find yourself being personally sued, without any of the protections incorporation is supposed to create.

Talk about a dangerous situation. Piss off one prospect or customer and they could cost you quite a bit.


But I Don’t Spam!

Okay, but I don’t spam, you’re saying. What has this got to do with me? And, you know what, I believe you. In modern vernacular, I’m sure you don’t spam your clients or prospects. Unfortunately, in legalese, the definition of spam is a little less cut and dry than we’d expect it to be. At the crux of the issue is that, as of July 2017, a lot of things that I wouldn’t consider to be spam may be construed as such by the court. In other words, you need to make sure you’re crossing your t’s and dotting your i’s.

To understand what does and does not fit into the category of spam, we need to talk about consent. The two categories of consent are express and implied. So let’s make sure we understand what those two types of consent are.

  1. Express consent: Turning first to express consent, this one is fairly basic – the prospect / client has given you permission to message them. Now, notice that legally, the onus of proof is on you. That means that if you are sued, you need to prove that you were given you express consent to reach out. What that entails is not exactly clear. For example, quite a few of our Finaeo newsletter readers gave us express consent over the phone, however how we would prove that to a court is questionable. We have our notes from the call logs, which would certainly go a long way in proving it, but what the court considers legitimate versus illegitimate proof is something that has not yet been answered. Ah, the joys of case law. Likely, adopting best practices such as asking for an email opt-in when you first start chatting with a client, or sending them a form with a checkbox, would work well. To help, sign up below for a templated express consent contract that you can present to your client.
  2. Implied consent: Implied consent is a little more complicated. Up until July 1st, 2017, if someone had put their email up online, there was an implied consent. You could reach out to them as you saw fit. Likewise, if a person had ever worked with you or bought from you before, you were allowed to treat that as implied consent for life. However, all of this has changed. As of today, implied consent means a few specific things:

    • A client has purchased something from you in the last two years
    • A person / prospect has made an inquiry of you in the last six months
    • You have a personal relationship with the individual
    • You are sending the individual information about a product or service they purchased, such as expiration warnings, conversion upgrades, or renewal dates
    • You received a referral from someone you and the client have in common (some caveats, however – see tip #3).

In all of these cases, you can continue reaching out to the person. Now, while some of these points seem fairly clear, I do have some concern over point #1. Specifically, let’s say you sold term insurance for a client three years ago. You are still the agent of record for the policy and responsible for answering questions on it, and you still receive a commission trailer every year. However you haven’t heard from the client since the sale closed. So, then, can you reach out to this client unsolicited? On the one hand, they could potentially be seen as still purchasing from you as long as you’re their agent of record. And, undoubtedly, you could reach out regarding a conversion expiration, or a renewal. But what about sending them a random check-in email? Or adding them to a new newsletter? Honestly, I have no idea, and I suspect that nobody yet knows what the limits of this regulation look like.

So, in this morass of legal uncertainty, let’s go over a few basic tips that should hopefully keep you on the safer side of the law.

Tip 1 – Bought Mailing Lists Are Done, and Unsubscribe Buttons Are In

Many independent financial advisors that I speak to have used pre-bought mailing lists for marketing campaigns. The day of being able to do so is over. If those lists come with phone numbers, by all means, call them. However, ensure that you are not sending out commercial electronic messages to people you don’t know.

Now, for many advisors, this is going to pose a problem. You’re going to need to really change your behaviour. Gone are the days where you could add 5000 names to a list, shoot out a mass email, and hope to get a few leads. Instead, the future of financial advice will, more and more, be based on personal or professional relationships.  

A second part of this is that if you are sending out newsletters or doing any drip marketing campaigns to an email list, you need to make sure you have an unsubscribe button. No matter what type of consent you have in place, CASL requires you to create a simple unsubscribe mechanism. Now, mind you, this is mostly only relevant for people who do drip marketing on mailing lists. Make sure the people receiving your email are able to leave.

Thankfully, every modern day email marketing platform will do this automatically for you. As such, if you’re doing email marketing, it’s time to switch from mail-merging to something like  MailChimp instead.

One last small note – when your assistant reaches out on your behalf to any clients, make sure he or she identifies you in the email. Otherwise, you may be violating CASL.

Tip 2 – Prune your mailing lists

Once more, if you are using mailing lists to reach out to a number of people, it is time to starting pruning said list. Go through it thoroughly and remove anyone who has not given you express consent (in a provable manner) or anyone who does not have implied consent to receive communications from you.

This may be a painful process – you’ve likely amassed a large number of names over your years as an advisor. Deleting a large chunk of them would suck on the best of days. So, here’s a suggestion – if there are certain names you really don’t want to take off your list, give them a call. Check in with them over the phone and see how life is treating them and if you can be helpful somehow. If the conversation goes well, ask them if you can email them updates, and when they give you express consent, send them a templated email with a little opt-in button, or confirmation of this consent. Even something as simple as emailing them a thank you note and asking for consent in it could work:

“It was great seeing you – as we discussed, to stay compliant, I need express consent from you to keep sending you information in the future. Let me know if that’s fine!”

As mentioned above, the issue here is that in a potential lawsuit, the onus of proof is on you. Written proof is always going to be better than a confirmation over the phone, if only for the sake of being able to, well, prove it later. So try to get something in writing – either through forms, through emails, or through an in-person signature contract.

Overall then, use this as an opportunity to re-engage with long lost leads and clients. That way, not only are you making sure you’re CASL compliant, but you’re also rebuilding fresh relationships.

Tip 3 – Referrals Get One Swing at Bat

So, if you’re anything like the financial advisors I work with, referrals are your bread and butter. After all, the best way to get business is having a happy client send happy prospects your way (or send you their way instead). Unfortunately, the CASL rules are going to make your life a little more difficult.

The good news is that you can still email a referral that you get from someone. If a client, friend, or contact tells you that you should talk to someone they know, and provide you with their email, you can shoot them a line. In it, you need to include the referrer’s full name. The bad news, however, is that you can only email them one single time if they don’t respond. Yep, just once. No follow-ups allowed. So if they forget to respond because they’re busy and it slips their mind, you really won’t be able to reach out anymore without “spamming” the prospect. This rule is especially frustrating, because many prospects do require some follow-up, and the CASL regulations ensure that you can’t do your job properly.

So what can you do? Well, I would advise a few things. First, when getting a referral, ask for a number as well as an email. They don’t respond to an email? No big deal, call them and reference the email. Make sure they’re ignoring you because they’re uninterested, not because they’re busy. Second, be honest with these prospects. Let them know that due to CASL regulations, unless they email you back, you won’t be able to reach out again. That way, they won’t assume that even if they let the first email slip, you’ll contact them again that way.

Tip 4 – Add in a process to get express consent from new clients and prospects

This tip is going to pay dividends down the line. Look, implied consent is great for opening up a relationship. A prospect emails you or becomes a client by buying a product through you, and you are able to respond appropriately for 6-24 months, depending on the situation. However, financial advising is a relationship game. You likely want to be able to reach out to your clients in five years, as well as in two.

So, it’s time to make getting express consent part of your process. Where you put it into the process is up to you. Maybe in the first email interaction with a prospect, you ask them to give you express consent to reach out for CASL regulatory purposes over email. Maybe when a prospect meets you to purchase insurance, you have them sign a simple contract. Need a template to set up such a contract? Sign up below and we’ll send you a contract we use in-house.

Tip 5 – Now is the Right Time to Get on CRM

This is a not so subtle pitch for our CRM & insurance agency management software.

One of the biggest benefits an advisor-specific CRM can offer is CASL protection. This is done in a few ways. For one, in many firms, a prospect may have multiple people reaching out to her. If she sends a message that she doesn’t want to be bothered to one advisor, it may be very hard to track. Said advisor may forget to tell another member of the team, leading to CASL exposure.

On top of that, as we move towards a more relationship-driven model, whereby old tactics such as purchased mailing lists don’t work, keeping track of your existing clients and touch points will become even more important. If your main lead engine goes from cold-emailing to referrals, you better be making sure to stay close to your existing clients, as well as ensuring that no prospect slips between the cracks. A strong CRM will keep you on track here.

Sign Up Below To Get a Templated Express Consent Form

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