As an advisor, do you have one or more accounts on social media platforms, such as Twitter, Facebook or LinkedIn?
If so, are you ready for the SEC’s adopted amendments to Form ADV and the Advisers Act books and records rule?
Registered investment advisors filing an initial Form ADV or an amendment to an existing Form ADV on or after October 1, 2017 will be required to provide responses to the adopted form revisions. This includes the new requirement that advisors disclose their firm’s social media platforms in Section 1.I of Schedule D in Form ADV.
The change in social media disclosure signifies a big shift in the way that the SEC will approach and evaluate an advisor’s risk profile.
What’s the big deal?
Up until now, advisors only needed to list their corporate websites on Form ADV. However, advisors will now be required to list all their corporate social media accounts, including corporate social media pages and other publicly-available, business-related profiles on LinkedIn, Twitter, Facebook, and so on.
This has implications for an advisor’s compliance procedures and risk exposure. The specific inclusion of social media signifies the SEC will heavily scrutinize an advisor’s corporate social media accounts during an examination or audit, which is stated in the final Form ADV and Investment Advisers Act Rules.
It’s not too late to prepare
Now that social media accounts are under the microscope, it’s critical that advisors archive and supervise their corporate accounts. The SEC will ask for social records, so firms must find the most efficient and thorough way to retain and produce this type of content.
A comprehensive archiving platform provides the solution that allows firms retain and produce social media alongside other frequently requested communication records, including email, text messages, and website content. Records can be located and produced quickly in the event of an examination, so regulators can review social media conversations and information exchanged with clients or prospects across various communications channels.
For instance, if a conversation between an advisor and a prospective client starts on a website, moves to email, and concludes on Facebook, records within a firm’s comprehensive archive will show the entire interaction with across multiple content channels.
If you use Facebook, Twitter, LinkedIn, or any other publicly-available social media platform to communicate with clients and prospects, now is the time to revisit your social media policies and recordkeeping processes and ensure they are ready for regulatory scrutiny.
Founded in 2001, Smarsh helps more than 20,000 organizations meet regulatory compliance, e-discovery and record retention requirements. The company is headquartered in Portland, Oregon, with offices in New York City, Boston, Raleigh, N.C. and London.
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