Advisers looking harder at social media, pay-to-play compliance

The investment advisory industry has boosted compliance testing over the past year, especially in the areas of social media and pay-to-play policies, according to an annual survey. About 80% of firms now have written policies about social networking, compared with 64% last year and 43% in 2010, the survey of 555 compliance professionals at federally registered investment advisers found. All but 15% of firms said pay-to-play rules apply to them, according to the survey. Three-quarters of advisers apply their pay-to-play policies to all employees, up from 68% last year. Of those surveyed, only 12% limit their policies to those who legally must be covered. About 60% of firms require pre-clearance of any political contributions and 7% ban all political contributions, according to the seventh annual survey, sponsored by the Investment Adviser Association, the ACA Compliance Group and Old Mutual Asset Management. “With the highest response to the survey to date, it is apparent that the industry understands the importance of considering industry best practices in the continuing development of a firm's compliance program,” said Amy Yuter, senior compliance manager of Old Mutual Asset Management. Nearly 80% of firms reported they have not decreased compliance testing in any area, according to the survey. Firms also are increasing compliance for advertising and marketing, and for personal trading, the survey found.