The Financial Advisor’s Guide to Social Media Strategy & Policy

2017 EDITION

The U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) recognize social media's growing role in firms' marketing and communications strategies, and have provided guidance on extending compliance programs to this dynamic channel.

This guide contains practical steps that will help you develop a social media strategy and policy that meets social media recordkeeping and supervision regulatory requirements, while gaining maximum business value from your social efforts.

With smart compliance practices and supporting technology, you can be prepared to present your social media records and evidence of your supervisory procedures, in the event of a regulatory request or exam. This guide also provides insight on practices that can help you become proactive and diligent with supervision and ready to respond to discovery events including audits, examinations and litigation.

Key Social Media Regulations for RIAs/BDs

FINRA SOCIAL MEDIA GUIDANCE

FINRA Regulatory Notice 17-18:

Social Media and Digital Communications

Many financial services firms struggle to understand and fully embrace social media and mobile communication rules.
In light of emerging technologies and communications, FINRA published Regulatory Notice 17-18: Social Media and Digital Communications in May 2017, providing more detailed guidance on the FINRA rules governing social media and digital communications for member firms.

The guidance clarifies the rules governing communications with the public via social media, and the use of personal devices for business communications. The Notice also reminds firms of the recordkeeping, supervision, and content requirements for such communications.

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FINRA Regulatory Notice 10-06:

Guidance on Blogs and Social Networking Web Sites

FINRA Regulatory Notice 10-06 (Jan. 2010) includes details about social media communication recordkeeping, suitability, and supervision requirements, and provides definition for elements unique to the medium.

The notice addresses five key guidance areas: recordkeeping responsibilities, suitability responsibilities, types of interactive electronic forums, supervision of social media sites, and third-party posts.

FINRA Regulatory Notice 11-39:

Social Media, Websites, and the Use of Personal Devices
for Business Communications

Guidance on Social Networking Websites and Business Communications
Since the publication of FINRA Regulatory Notice 10-06 in Jan. 2010, more questions have been raised regarding how those rules should be applied.
Regulatory Notice 11-39 responds to those questions and provides additional clarification of the rules. It is not meant to alter the previous guidance.

The notice addresses five key guidance areas: recordkeeping responsibilities, suitability responsibilities, types of interactive electronic forums, supervision of social media sites, and third-party posts.

SEC SOCIAL MEDIA GUIDANCE

Key points from this SEC guidance include:

When comments about an advisor's firm appear on independent, third-party social media sites, the firm may promote those comments under specific circumstances. In some scenarios, SEC-registered advisors can even steer prospects to comments and testimonials provided the advisor:

  • Doesn't encourage clients to post social media or web comments.
  • Doesn't write the comments under an alias to hide the reviewer's true identity.
  • Publishes the entire body of comments without filtering negative comments.

Also, if you choose to include a link or content from a third-party, independent site on your social media pages, consider archiving the third-party sites. This isn't mandated by the SEC, but it may help your firm substantiate the validity of linking to this type of content.

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Strategy and Policy

A social media strategy is the foundation for your social media activities, because it aligns your day-to-day social media networking tasks with objectives that support your overall business goals.

The strategy doesn't need to be complicated. Whether this is your first time developing a social media strategy, or you already have a plan in place, start simple.

The following questions will help you develop a solid strategy document that will empower you to confidently engage prospective and current clients on social media.

Things to consider when determining your social media policy:

  • Why do you want to use social media?
  • Who is your audience?
  • What are the right social channels for your business?
  • Who will create and curate content?
  • How will you organize your efforts?
  • How will you interact?
  • How will you adjust course?

The regulatory agencies for the financial services industry, the SEC and FINRA, have recognized the importance of social media for firms and have provided regulations and guidance on how advisors can extend compliance programs to social networks.

This e-book contains the guidelines provided by these regulatory agencies, as well as practical steps that will help you develop smart social media strategies and policies to gain maximum business value from your social efforts while meeting your compliance obligations.

In Our Guide You’ll Learn

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Key social media rules and regulations for broker dealers and registered investment advisors that are enforced by the Financial Industry Regulatory Authority (FINRA) and US Securities and Exchange Commission (SEC).

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Effective strategies for developing a successful social media presence that meets compliance obligations.

Personas and Identity Management

Considerations when creating social media personas and communications.

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The value of each social media platform, including those that incorporate messaging, video, and business/professional networks.

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