Stay Above Board with Your Social Media

March 19 2019

by Kati Hess

Social media is the name of the game these days.

Recently, LinkedIn found that 81% of all small and medium businesses use some kind of social platform. And while social media is known for being a seamless and fast form of communication, it also brings with it a level of record-keeping for financial advisors.

FINRA recently released their 2019 Social Media Strategy and Policy Guide and we’re here to help make sense of it all. We know you don’t have the time to go through it line for line so we did it for you. A few of our main takeaways from this years guide are:

Record-keeping: Firms must keep records of business communications under SEA Rule 17a-4(b)(4). They also need to educate their representatives on the difference between business communications and personal communications. If a post pertains to the firm’s products and services then it is a business communication and must adhere to compliance standards. Social posts by clients on your account’s page are not subject to FINRA, but if you like, share, pay for, prepare, control or “explicitly endorse” the content then you’re adopting it and it is subject to FINRA.

Hyperlinks: They can be tricky — be careful when including hyperlinks to third party content. According to FINRA, you are “adopting” any content on the hyperlinked site so it cannot not be false or misleading, because it also must be covered by compliance standards.

Endorsements: Or testimonials (unsolicited third party  comments) are allowed but only as long as the firm/advisor does not like, comment, or share said testimonial or endorsement.

Recommendations: Think twice when it comes to recommending specific investment products. Social media has the ability to reach a wide range of audiences so recommendations must be suitable for every investor that receives it. And don’t forget to include any additional disclosures you might need!

Permissions: Policy, policy, policy! Make sure a policy is in place and understood by all representatives who have access to social media channels. Everyone needs to be trained and supervised if they’re posting on a firm’s social media channels. This policy will also include instructions on approved channels, methods of communication, and language to be used.

We can always count on change when it comes to both social media and compliance and following along can be a full-time job in itself! That’s why we’re here, to help you stay in the know and above board with your online presence.

Interested in building a social media strategy? Contact us today at 800.922.2642.


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