Financial Advisor Social Media Compliance Guide

Financial Advisors and firms are accustomed to being regulated. All public communications, regardless of the medium, must adhere to the regulatory guidelines.

New media and electronic communication such as social media and blogging are not much different than any form of public communication. There are a number of best practices that financial advisors can adhere to in order to stay compliant with their online marketing and communication efforts.

Regardless of how your business or firm is structured, you will need to either ask your firm for social media policy guidelines and parameters or develop a social media policy for your firm. In addition, you will need an archiving software solution in place for the recording and monitoring of your social media activity.

It is imperative that you understand the rules of the regulatory guidelines that you or your firm fall under as well as the specific social media policy and guidelines that you are subject to before you begin to engage or participate in social media activity.

Below is an overview of some best practices to follow for compliant financial advisor blogging and social media participation:

Blogging:

  • Neither the SEC or FINRA has specific regulations regarding blogging, but you should always be aware of the applicable rules surrounding electronic communications and advertising. Blog posts (articles, videos, images, etc.) should be pre-approved by your firm’s compliance department. They are considered to be “advertisements”. Once pre-approved, blog posts can typically be distributed out to your social media profiles. We also recommend that you back up your blog regularly and archive the RSS feed for your blog for an added layer of protection.
  • If you are planning to provide investment and financial planning commentary, make sure to steer clear of specific investment recommendations unless you have the approval to discuss from your firm. Do not make exaggerated statements or guarantees about past performance being indicative of future performance. Remember, it is just as if you were typing an email, writing a letter, or speaking in public. You should always think carefully about what you say through text, video, or audio communications. It is best to keep investment discussions general in nature.
  • If you allow commenting on your blog, you should monitor those comments prior to approving and publishing them.
  • Providing a “disclosure” or “disclaimer” page on your blog describing your views and the views of those who comment on your blog is a recommended practice.  In addition, you should provide a statement about the states that you are licensed to conduct business in.
  • Always give credit for your information sources, whether it be articles, concepts, quotes, images, slides, or videos!

Social Networking Sites:

  • Your social media profile pages will most likely need to be pre-approved by the firm or Broker/Dealer you are affiliated with (if applicable), and new approvals are needed any time you update your “static” profiles.
  • Social media activity is considered to be “interactive” and typically does not require pre-approval, but many firms are requiring this. All of your social networking activities should be archived so that they can be monitored and reviewed by compliance. There are a number of firms providing software solutions for compliance archiving (Arkovi, Erado, Socialware, Actiance, Hearsay).
  • Social media communication is considered to be a “public appearance”. Keep personal and business interactions separate whenever possible, and conduct yourself professionally at all times! It’s typically okay to sprinkle some personal into your professional profiles, but it’s not okay to go the other way around and mention anything business related on your personal social media profiles.
  • Social media communication should be archived regardless of device! (laptop, desktop, mobile phone, Ipad, etc.)
  • Client testimonials are not allowed on any of your social media profile sites. Some firms consider the Facebook “Like” button to be an implied testimonial!
  • Check your firm policy on communicating within social network messaging, chat, or email systems. If any message pertains to business, it needs to be captured or copied to your business email address.
  • When updating your status on social networking sites, be prudent about any links, images or videos that you share, “like”, or “retweet” that could be interpreted as a “recommendation”, “endorsement”, or “implied endorsement” of a financial company, products, investments, or services.
  • If you allow 3rd party comments and posts on any of your social media sites (i.e. Facebook wall), consider using a disclaimer statement on the site.
  • Make sure you understand the privacy settings and visibility of your actions on social media channels. Educate yourself on the social tools and rules so that you don’t make mistakes that can harm your reputation or cross the line with your compliance department and/or the regulators.
  • Use common sense. If you’re unsure about a particular social networking activity, don’t engage until you completely understand the rules.

Disclaimer:  Wired Advisor is not a compliance firm. The information above is believed to be accurate but check with your firm to determine your specific policies and parameters before building and activating a social media presence!

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