By Robyn Conti
It’s no secret that financial industry regulations are pretty strict, especially when it comes to relatively new territory like social media. As an advisor, it’s important for you to let your personality and expertise shine through in your interactions on social platforms like Facebook, LinkedIn, and Twitter when you’re engaging with clients and prospects. However, it’s equally as important to keep compliance top of mind when doing so.
Since compliance is such a big deal, many advisors are still hesitant to make social media a part of their prospecting routine. While that’s certainly understandable, it doesn’t have to be scary, as long as you follow a few basic guidelines. Here are some commonsense tips to help you stay compliant while effectively using social media:
- Stick to the rules: Your firm likely has guidelines that explain what you can and can’t do on social media. Understanding those rules and following them closely is the best way to “keep your nose clean.” Ask if your firm offers social media compliance training before engaging online. Not sure if your post passes muster? Ask your OSJ or compliance officer. They’re there to make sure advisors’ activities are aligned with established laws, and they’re happy to help.
- Use common sense: If you wouldn’t say or do something in person or during a seminar, for example, don’t do it on social media. Existing FINRA and SEC rules still apply, and anything you do on social media should comply with federal securities laws, including, but not limited to, antifraud, compliance and recordkeeping provisions. Again, your OSJ is an excellent resource to help you stay compliant.
- Keep detailed records: Financial advisors are required to keep records of all communications, according to FINRA rule 3110. That includes all of your posts on social media. It may sound like a drag, but there are great tools out there to help with archiving, including HearsaySocial, SocialWare, Actiance, and Smarsh.
- Post disclaimers early and often: Avoid making any recommendations or endorsing specific investment strategies or products, for example. This is a murky area that could lead to big trouble if you’re not careful. You can protect yourself by posting a disclaimer on all of your social media profiles that lets everyone know nothing you say should be construed as investment advice. What’s more, if you’re posting an advertisement or promotion, be open and honest about it. Many advisors use the #ad hashtag to let their followers know that a specific post is being used for advertising.
- Steer clear of testimonials: Under existing regulations, if your followers like or comment on one of your posts, it could be considered a testimonial or endorsement of your practice or services. This is a big no-no. Case in point: If a client sings your praises on LinkedIn or endorses your for a particular skill, it could be considered testimonial, and isn’t allowed under the law. However, if a client simply clicks the like button on a picture you posted, that may not be construed as a testimonial. Since it can be tricky territory, advisors typically disable the endorsements function on their LinkedIn profiles. On Facebook, it’s a common best practice to simply avoid posting any content that could be considered a testimonial if a client likes or comments on it.
So you see, navigating the social media compliance waters isn’t nearly as complex as you might have thought. All it takes is some common sense, familiarity with existing regulations and your firm’s policies, and a little help from your OSJ. By relying on these simple tips and guidance from the right resources, you can create a successful social media presence and meaningful engagement with your clients and prospects online.