Social Media, like many things in the financial services industry has a lot of risks that need to be handled appropriately. FINRA and the SEC have issued rules and guidance to help Advisers regulate this regulatory maze but they fail to give specific instructions. Instead they leave it up to the Adviser’s Compliance Officer to create reasonable policies to monitor social media use.
There are a few risk areas we feel compelled to discuss here so that Advisers have a little better idea of how to handle certain circumstances.
One such circumstance is what an Adviser should do if someone adds a negative comment to their social media site. Human nature’s first instinct is to delete it. However, this is a very bad idea. You need to report anything that would be considered a complaint to your Compliance Officer. If you are unsure whether it rises to the level of a complaint, you should consult your Compliance Officer. You should never respond to anything that is a complaint and if it is not a complaint, remember anything you put on your site is visible to everyone. Translated that means be careful that you are projecting the image you want for yourself and your firm and never put anything negative in writing on your social media site.
This is your site and you are responsible for everything on it. So use your Compliance Officer for guidance, always follow the regulations and never forget this is a public forum, visible to just about everyone. If someone posts something that is inappropriate, remove it immediately and let your Compliance Officer know what happened. You should also let the individual know that this is unacceptable and provide guidance on what can and cannot be posted. Remember, your image and brand are at stake, so view all comments through that lens.
Mistakes do happen so if something is posted in error, either remove it or correct and repost it.
Advisers also need to carefully monitor their Privacy settings to make certain their content is only visible to those they want it to be visible to. Since social media sites make numerous updates to how their application works, Advisers need to monitor the social media vendors for updates that may require them to update their privacy and account settings.
Social media is evolving at an unbelievable rate, Advisers need to be ready to ride the wave and information is the key to controlling the ride.
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.