Building a presence on social media sites like Twitter, LinkedIn and Facebook can help financial advisors build a strong brand, attract new clients and enhance relationships with existing clients. But with stringent rules and regulations from FINRA and the SEC in place, many advisors have shied away from embracing social media to build their businesses.
Now, however, the SEC has loosened its stance on how financial advisors can leverage social media. The biggest change, of course, is that financial advisors may now promote client reviews that appear on third-party social media sites like Yelp. They may also comment on their personal lives via a social media account that is used for business purposes.
Despite these changes, advisory firms still need to have a solid process in place for archiving and monitoring social media use before they jump into the social arena (just as they must for archiving and monitoring email use), because the regulating bodies consider social media records to be corporate business records.
But keeping track of social media activity is more challenging than keeping track of more traditional records like contracts or new account paperwork. It’s also more difficult than keeping track of email messages, which can usually be found on a corporate server or an employee desktop after they have been sent.
With social media, people can alter or delete posts within seconds of publication. Unless a firm has an archiving solution in place, there’s generally no record of these changes anywhere. When it comes to social media management and compliance, here are three best practices financial advisory firms should keep in mind:
1. Treat social media like advertising. Provide compliance officers and the management team a place to review and approve social media posts before they go live. This gives advisors peace of mind before they post and ensures that inappropriate content is not made public.
2. Provide a platform for posting. Rather than asking advisors to post directly to their various social media accounts, providing a platform through which they can post approved content to a variety of networks gives the firm greater visibility into social media activity.
3. Make everything auditable. All social media posts should be captured and stored—along with information about the advisor who created the post, date and time the post was made and where the post was published. Ideally, the firm’s social media archiving solution will integrate with the document management system it uses to archive all its other content. This ensures that everything is in the same place and stored according to the same conventions, which makes content easy to find in the event of an audit.
Firms that adhere to these best practices can rest assured that they are compliant with the social media archiving and monitoring guidelines from FINRA and the SEC.
Michael Laks is a speaker and financial program strategist at Laserfiche, where he focuses on complex financial services issues involving regulatory compliance, integration with existing business applications and enterprise business process automation.
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