Online marketing plays a crucial role for many advisors, but many are unaware that Canada’s e-marketing laws are the most stringent in the world
E-marketing plays a central role in many advisors’ attempts to attract new clients. In what is an increasingly competitive industry, taking steps to establish a brand and having a recognizable online presence is simply crucial. But, Canada’s anti-spam legislation (CASL) places strict limitations on the sending of promotional emails by advisors – and other businesses – and regulators are not shy of handing down heavy fines.
Ultimately, the law prevents advisors and advisory firms from sending any commercial electronic messages (CEM) to prospective clients without their consent. A prospect or client is required to opt-in before they are sent any promotional communications.
“Canada’s anti-spam law is the most stringent in the world,” says Eloïse Gratton, partner and National Co-Leader of the Privacy and Data Protection Practice Group at Borden Ladner Gervais LLP. “It’s a complex piece of legislation with very high penalties. Therefore, organizations are motivated to comply with this law, but they have been struggling because it’s hard to control every communication that is sent out and make sure you are 100% compliant.”
In a welcome relief for Canadian advisors, regulators have suspended provisions scheduled to come into force on July 1. Known as private right of action, the provisions would have allowed lawsuits to be filed against individuals and organizations for alleged violations of the legislation.
“The concern of getting hit with a class action lawsuit is no longer on the table, which is great news,” says Gratton. “Businesses still have the incentive to comply with the laws because the CRTC (the Canadian Radio-television and Telecommunications Commission) can still issue monetary penalties, which they have done since the legislation came into effect in 2014.”
It’s not all good news for advisors, though. There is a distinct lack of clarity around how exactly the CRTC interprets parts of the laws and many advisors are unsure of how the rules – and certain exemptions – work in practice. Many are unsure of exactly what messages they can and cannot send. The rise of marketing and interacting with clients and prospects on social media and other online platforms is simply adding to the confusion.
According to Gratton, the U.S. has a clearer more forward-thinking approach. “If you send a business-type message in the U.S., like a transactional message, it is not considered as spam even if it includes a small portion of promotion,” Gratton says. “Here, we don’t have that distinction so companies are nervous. If you include a URL to your website or your logo, can that be defined as a commercial electronic message? In many cases, it is not clear.”
Gratton also believes that Canada’s laws may prevent advisors from providing the best possible customer service in certain situations. “Sometimes, when you are responding to a message and trying to provide good service, the most appropriate thing to do is promote a new service to your existing customer, which would make that message no longer exempt from the opt-in rule,” Gratton says. “There are a lot of challenges with this law, but at least there won’t be any class action lawsuits.”
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