Keep your social media presence in regulatory shape

April 23 2013

by Client One Securities

Social Media Insurance

Social media is a great way to connect with friends and clients and increase awareness of your business, but for Broker Dealers and Registered Investment Advisors, the SEC and FINRA consider every business related post, comment or “like” on social media sites advertising. With the evolving nature of online marketing, some social media elements such as being “liked” on Facebook or “endorsed” for skills on LinkedIn may fall under what is considered a testimonial.

The Investment Advisor Act of 1940, Rule 206(4)-1, prohibits using testimonials (including implied testimonials) by Investment Advisor Representatives. This could include LinkedIn endorsements and Facebook likes. Under FINRA Rule 2210(d)(6)(B), testimonials are not completely prohibited. Check with your Broker Dealer for the appropriate disclosures they require when using testimonials.

So, while it’s easier to curb the content you post, controlling what others say or act on can be more difficult. Creative Marketing’s own Broker Dealer and Registered Investment Advisor, Client One Securities, allows a static LinkedIn profile with prior approval and endorsements hidden. (See how to hide LinkedIn endorsements below.) “For other social media tools, we provide our Registered Representatives and Investment Advisor Representatives with an opportunity to subscribe to a service for monitoring and retention of social media” said Mike Tuma, president of Client One.

Broker Dealers and Registered Investment Advisors should have policies in place regarding the use of social media and have a system to monitor social media sites to retain the content as advertisements. Be sure to check with your Broker Dealer or advisory firm for specific regulations.

Related articles and information:

SEC Sends Sharp Warning to Advisors

FINRAs New Rules on Communication with the Public are Finally Approved

FINRA Regulatory Notice 11-39

SEC National Examination Risk Alert: Investment Adviser Use of Social Media


How to Hide LinkedIn Endorsements

You have the option to hide an endorsement sent by a connection. (There is no way to unhide an endorsement at this time.) To do so:

  1. From your own LinkedIn Profile, click the arrow next to endorsements for a specific skill.
  2. Click Hide Endorsement.
  3. Click Close.

You can also delete a listed skill from the Skills & Expertise section appearing on your Edit LinkedIn Profile page. With no Skills & Expertise section showing, your 1st-degree connections won’t be able to automatically add endorsements. Plus, you can ignore emails for any received endorsements of skills that don’t currently appear on your LinkedIn Profile page.

To delete a skill:

  1. Roll the cursor over Profile in the upper left on your LinkedIn member account pages for a drop-down list. Then, select Edit Profile.
  2. Scroll down to the Skills & Expertise section on your LinkedIn Profile.
  3. Click Edit for that section.
  4. Click the X next to the specific skill to delete it.
  5. Click Add Skills & Expertise to save your changes.

Broker-Dealer and Investment Advisor services provided by Client One Securities LLC, Member FINRA/SIPC. Client One Securities LLC is a wholly owned subsidiary of Creative Marketing. FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC. 12738 – 2013/4/2

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