Compliance Guidelines for Financial Advisors - Blog and Social Media

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FINRA has already released the guidelines for blogging and social media for Financial Advisors last February 2010. For those of you who are looking to start building your network online or beginning to be Sociable! here are the things that you need to know.

Here is a brief overview of FINRA's suggested guidelines:

Recordkeeping

Firms must be able to ensure that they can obtain records of both “interactive” and “static” online communications.  Although the technology does exist for this, it is up to each firm to determine how and what system they will adopt to satisfy this requirement.  Currently there are even services that individual financial advisors can adopt on their own that enable archiving and reporting on most social networking and blogging activity (www.arkovi.com)

Suitability

The bottom line here is do not make specific recommendations in any of your communications.  You should keep your comments, posts, and interactions general in nature if you are referring to anything that is financially related.

Interactive Electronic Forums

Participation in an interactive electronic forum does NOT require pre-approval, but is still subject to supervision (similar to the way your email is supervised and archived; see ‘Recordkeeping’).  Interactive electronic forums include Facebook, Twitter and Linked In, but these sites also have “static” content.  Any “static” content has to be pre-approved.  This would include the information sections and descriptions about you.  What is still unclear is whether or not blog “posts” are considered static (requiring pre-approval) or interactive (would only be subject to supervision).  The guidelines speak to both.  Blogs are generally dynamic and interactive in nature whereas traditional websites are considered to be static, but most firms will probably require that blog posts be pre-approved before being published.

3rd Party Posts

This section of the guidelines pertains to the posting of third party content on a site established by the firm or its personnel.  FINRA as a general matter suggests that these do not require prior approval unless the firm is involved in the preparation of the content or explicitly or implicitly endorsed or approved the content.  FINRA suggests that firms adopt a policy for proper usage guidelines for customers and other third parties that are permitted to post on firm-sponsored web sites.

To download the full regulatory notice on blog and social media, click here.

Topics: Blogging, financial advisor, FINRA, forum, microblogging, Marketing, Social Media