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Tim Sargisson: How GDPR will hurt adviser recruitment

The Global Data Protection Regulation comes into force in a little under two months but there seems precious little in the way of detail regarding its impact on financial services.

The FCA and Information Commissioners Office did publish a joint update last month but it did not add very much in terms of information to ensure firms are ready to comply from May.

The simple fact is that GDPR vastly increases the rights of the individual and this will have a profound effect on all businesses. But the rights of the individual extend to you – the adviser – as well.

Many of you reading this will have received an unsolicited call at some point in your career. This may have been from a recruitment consultant, headhunter or a telephone account manager at a national firm.

Five steps to GDPR compliance

Some of you will be mildly irritated at being contacted in this way but most are flattered and intrigued as to where the call might lead. However, under GDPR this approach to recruitment will be hit by the law of unintended consequences.

Recruitment processes are largely driven using data stored in a customer relationship management system. This data consists of information usually purchased from companies that hold databases of intermediaries within the UK financial services sector. These databases are an amalgamation of information from various sources, including the FCA register and registration information from websites.

CRM is then used to drive telephone and email marketing activity, where consent to use this data is based on the implied consent obtained by the companies at time of data collection.n.

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GDPR means firms are simply no longer able to hold data where there is no clear consent by the individual. Cold-calling or unsolicited email campaigns to individuals from a purchased list is no longer viable. It is not possible to rely on an external agency to obtain the correct consent.

To continue to use this data, firms need to contact each individual prior to 25 May to explain why it is held, where it came from, what firms do with it and to request the individual opts-in to receive communications from the firm. Without consent, the information must be deleted.

Even when there has been communication in the past and where there is a commitment to contact again in the future (an arranged callback, for example) the firm must give the person a further opportunity to withdraw consent should they wish, with consent clearly recorded in CRM. These individuals would then need to be reminded of their ability to withdraw consent every six months.

So, advisers: do not take it personally if the phone stops ringing with the “once in a lifetime opportunity”. Blame the GDPR.

Moving forward, I expect to see a rash of freshly buffed-up adviser profiles on social media sites.

Tim Sargisson is chief executive officer at Sandringham

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “GDPR means firms are simply no longer able to hold data where there is no clear consent by the individual.”

    Simply wrong.

    Under GDPR consent is one lawful basis under which you can process personal data. In practice consent will rarely be used because it is so restrictive and inflexible under GDPR.

    NB it’s the ‘General’ Data Protection Regulation, not ‘Global’.

  2. I am finding that many recruiters are using LinkedIn, ( other reputable sites are available) which requires me to accept their invitation, so I can choose whether to be approached or not.

    My data is in the public domain, professional, personal and sporting, so it is a bit late to close the stable door.

    Commonsense does seem to be a rare commodity in these times of self perpetuating legislators, who in my opinion add little value to the end consumers, whoever they are.

    What happened to cost/benefit analysis, or is it just assumed that there is a bottomless pit of money to pay for all this compliance?

  3. Grey area, it doesn’t matter how many times you proofread something you will still moss the obvious General, not Global.
    Consent is not quite as the last resort but the other lawful reason would normally take precedent, in our case contract or ‘legitimate interests’.

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