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#HSonAir Employee Spotlight Series: Interview with Yasmin Zarabi of Hearsay Social

YZ_L-copy-squareIn episode 11 of Hearsay Social On the Air we continue the employee spotlight series by introducing our in-house legal and compliance specialist Yasmin Zarabi (@yasminzarabi).
After hearing a bit about Yasmin’s background, we discuss the current state of social media in financial services and our participation at FINRA’s Advertising Regulation Conference in Washington, D.C. last month.  Join the conversation with @VictorGaxiola and @RonnyKerr on Twitter using hashtag #HSonAir.
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Social media bridges sales, marketing, and compliance: Recap from #FTF_SMAC

This post was co-authored by Yasmin Zarabi (Sr. Director of Legal, Hearsay Social) and Stephen Selby (Assistant Vice President, Social Media, LIMRA).

We’re still excited to have met so many curious people and led a session at last week’s Social Media and Compliance in Financial Services (#FTF_SMAC), an event hosted in New York by the Financial Technologies Forum (FTF).

Event attendees included leading financial firms (including New York Life Insurance, MetLife, and Prudential Financial), social media innovators (including LinkedIn, Facebook, and Google), and influential third-party organizations and government (including the SEC and LIMRA).

In short, the conference was brimming with social media thought leaders from the financial services and social media industries.

We were delighted to lead a session, “Overview of Social Media Regulation in the Finance and Insurance Industries,” with two of the industry’s leading practitioners of social sales and marketing: Sueanne Comerford (Social Media Director, MetLife) and Kyle Marie Woods (Marketing Strategist, Thrivent Financial for Lutherans).

Here are a few of our key takeaways:

Social media creates an opportunity to combine marketing and compliance goals.

It’s commonly accepted among marketers that the holy grail is to send the right message to the right person at the right time. If you think about it, that’s not really at odds with the compliance team’s mission. In fact, as it relates to suitability, compliance teams are dedicated to empower marketing to do that safely and efficiently. In today’s highly connected, transparent world, technology that manages, monitors and enables this business process to align compliance and marketing is much more easily attainable.

The best sales relationships do one thing: sell people the right product.

Similar to the point above, it is ultimately the job of a salesperson to find the right product that fits their particular customer’s needs. If you sell the right product to the right people, then you will have happy repeat customers. Adding in the compliance perspective, selling the right thing to the right people should be equivalent to meeting your suitability obligations.

Social media bridges sales, marketing, and compliance. 

Here’s the big conclusion, drawing from both points above: One of the great, unintended consequences of social media is that it brings together formerly siloed areas of an organization, including sales, marketing, and compliance. When these groups work together, business results and productivity get unlocked. Take Thrivent, for example. The Fortune 500 financial firm realized early on that a compliance strategy based on screenshots would never be scalable. By implementing a social platform instead, the company experienced a 75% reduction in its effort to get pre-approved content to the field.

As a result of this implementation, Compliance is happy because they’re doing less work to keep track of everything. Marketing is happy because they’re controlling the message going out to the field. And Sales is happy because they don’t feel hampered or restricted by either Compliance or Marketing. The field can focus on what they do best: reaching customers and closing deals.

All in all, we found FTF’s event to be a huge success, and we look forward to the next!

Understanding new social media guidelines from the FTC Dot Com Disclosures

The Federal Trade Commission (FTC) recently issued a long-awaited update to its 2000 Dot Com Disclosures guide, taking into consideration the new online mediums for advertisers, specifically social media. The basic fundamentals of the consumer protection rules for advertisements remain the same, even for social media: advertisements must be truthful, not misleading, and proper disclosures made.

How do these guidelines apply to social media?

There are several important implications for advertisers to consider. First and foremost, the guidelines state that clear and conspicuous disclosures must be posted to avoid deception. If space is limited for the medium (i.e. Twitter) then the ad should be modified or not be made. Secondly, guidelines need to avoid using hyperlinks, but when necessary, they must be clearly marked. Finally, regardless of space constraints, advertisers are required to include disclosures alongside their ads.

Guidelines for posting disclosures

This is an example of a hidden disclosure with an unmarked hyperlink:

Example of a Facebook Page post not following FTC guidance.

If following proper practice, a brand should display its social media advertising disclosures prominently and in close proximity to the claim:

Example of a Facebook advertisement following FTC guidance.

Guidelines for hyperlinks and scrolling

If a hyperlink is necessary, then make sure it is specifically named and conspicuously placed. For example, in this tweet, the celebrity endorsing this product has clearly stated that they are a spokesperson for the product and that the pertinent information associated with the tweet can be found in the corresponding Bit.ly hyperlink:

@FamousCeleb: I’m a spokesperson for BarLite and it changed my life. More information: Bit.ly/BarLite #liteonlife

In the case of a long text, make sure the disclosure is visible near the claim. If the claim must be placed below a long screen of text, be sure to hyperlink the claim or disclosure within the text at the top of the screen.

Guidelines for pop-up disclosures

Pop-up disclosures are best when the disclosure is displayed before the decision to purchase is made.

For example, within the shopping cart experience on the advertiser’s website, the customer must be prompted to read the disclosure and confirm they have done so.

Ultimately, the advertiser needs to do everything they can to ensure that the consumer is aware of and has read all of the necessary disclosures associated with the product.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.