Five things to know about social-media compliance

For rookies of social-media compliance, here are five things that provide a solid base of knowledge

Feb 6, 2013 @ 10:05 am

By Amy McIlwain

Compliance continues to be a pressing topic for financial advisers who use social media.

Although advisers are becoming more comfortable with social media and acquainted with compliance regulations, it is something that must be thoroughly understood as well as revisited regularly. For rookies of social-media compliance, here are five things that provide a solid base of knowledge.

Static content : This is fixed, such as website copy, and social-network profiles and background images. The Financial Industry Regulatory Authority Inc. considers this content advertising. It must be preapproved, and any changes or updates must be documented. Those who are unsure if the content is static, ask whether commenting or communication possible. If not, it is static.

Interactive content: This comprises content that is changing and where people can communicate and participate in conversations, such as Facebook and blog posts, Tweets and instant messaging. This type of content doesn't need approval but must be monitored frequently to ensure that it doesn't violate Finra's communication rules. Like static content, interactive content must be archived and recorded.

Archiving: According to Finra, firms must archive all interactive content related to their business. NASD Rules 2210 and 2211 also state that firms must keep all communications for three years from the date of last use. Even though interactive content doesn't have to be preapproved, it is a great idea to have some form of internal approval process or social-media policy to ensure that all postings align with one's company's vision and mission. Those who are in the market for strong social-media archiving software, should check out “The Financial Advisor's Quick Guide to Social Media Archiving”.

The scoop on social-media recommendations: These require common sense. In essence, it isn't appropriate to recommend a product to one's entire network via a post to a social network. It may be appropriate to recommend a product to an individual with whom a financial adviser has been communicating in a private conversation on a social network, but if the conversation becomes that serious, schedule a personal consultation or meeting. Remember, social media is not for offering financial products but for generating leads and positioning oneself as an expert.

Third-party content: This consists of items such as posts and comments that aren't written or approved by one's company. Although an adviser won't necessarily be reprimanded for this content, he or she is still responsible for ensuring that it gets archived and recorded. Again, I recommend that advisers closely monitor and have an internal approval process for third-party posts.

Amy McIlwain is president of Financial Social Media, a consulting firm. This commentary originally appeared on the firm's blog.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

What's behind the TCA, ETrade deal?

Deputy editor Bob Hordt talks with senior columnist Jeff Benjamin about what each party in the recent acquisition stands to gain by joining forces.

Latest news & opinion

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

As Ameriprise case shows, firms on hook when brokers go bad ​

The SEC will collect $4.5 million from the brokerage firm for failing to supervise brokers who were ripping off clients.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Ameriprise to pay $4.5 million to settle SEC charges that five reps stole more than $1 million from clients

Agency censures firm for not protecting clients from thieving brokers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print