5 Things All Financial Advisors Should Know About Compliance

Amy McIlwain
Amy McIlwain • Posted on Feb 22, 2013

Compliance has been and continues to be a pressing topic when it comes to financial advisors and social media. While advisors are becoming more comfortable with social media and acquainted with compliance regulations, it is something that must be thoroughly understood and re-visited on a regular basis. If you are a rookie in social media compliance, here are 5 things that will give you a solid base of knowledge.

Static vs. Interactive Content

Static content is fixed content—like website copy, social network profiles, and social network background images. FINRA considers this content to be “advertisements”. This content must be pre-approved and any changes/updates must be documented. If you are unsure if the content is considered static, ask—is commenting or communication possible? If the answer is no, it’s static.

Interactive Content is content that is changing. It consists of content where individuals can communicate and participate in conversations—like Facebook posts, Tweets, instant messaging, and blog posts. This type of content doesn’t need approval, but must be monitored on a frequent basis to ensure it doesn’t violate the content requirements of FINRA’s communication rules. Similar to static content, interactive content must be archived and recorded, but it doesn’t have to be pre-approved.

Archiving: According to FINRA, firms must archive all interactive content related to their firms business. NASD Rules 2210 and 2211 also states that firms must retain all communications for a period of three years from the date of last use. While interactive content need not be pre-approved, it’s still a great idea to have some form of internal approval process/social media policy to ensure all postings align with your company’s vision and mission.

The scoop on recommendations: The rules about recommendations on social media require common sense. In essence,it is not appropriate to recommend a product to your entire network via a post to a social network. It may be appropriate to recommend a product to an individual with whom you have been communicating in a private conversation on a social network, but if the conversation becomes that serious, I recommend scheduling a personal consultation/meeting. Remember, social media is not about offering financial recommendations to people, it’s about lead generation and positioning yourself as an expert.

Third Party Content: Third party content consists of posts, comments etc. that is not authored or approved by your company. While you won’t necessarily be reprimanded for this content, it’s still your responsibility to ensure it gets archived and recorded. Again, while it’s not required to approve all of this content—I recommend that you closely monitor and have some sort of internal approval process for third party posts.

If you have any questions about social media compliance, don’t hesitate to contact us! Also, if you want to check out the original FINRA compliance documents, click here!


About Advisor Websites

Founded in 2012, Advisor Websites specializes in helping financial advisors stand out and grow their business online with conversion-friendly, personalized websites and targeted digital marketing solutions, all which follow FINRA and SEC guidelines.

Disclaimer: The content of this article is for informational purposes only. If you are planning to implement a new marketing practice and are unsure what the regulations are, always contact your compliance department first.

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