Social media is available to everyone across the world. Businesses and financial advisors around the world utilize social media to enhance their business practices for good reason.There is a fine line between utilizing social media properly and using it unethically, making social media compliance for financial advisors extremely important.
The Financial Industry Regulatory Authority (FINRA) enforces social media compliance for financial advisors strictly. Their main goal is to supervise and control social media practices to ensure investors are protected and market integrity remains in place. FINRA is very tough on enforcing compliance, but here are some ways you can ensure you remain compliant with your social media practices
Have a Social Media Policy in Place
Any financial firm has an obligation to supervise their advisors’ activity on social media closely. One way to help achieve social media compliance for financial advisors is to have written supervisory procedures clearly outlining guidelines and compliance rules. A financial advisor may operate ethically on social media, but if the firm doesn’t have a social media policy in place, then they are committing a violation and can be penalized. Firms should review their policy with all employees and do their due diligence in house to enforce the policy. This proactive approach will ensure compliance and avoid a FINRA violation.
Archive All Communications
Firms also need to have the proper technology in place to archive any and all communications. Social media compliance for financial advisors requires each type of communication to be archived, regardless of whether the communication was sent via a business or personal account. The archived communications must also include sent and received messages, and those messages should be reviewed and monitored as they take place. The monitoring of these messages ensure social media compliance for financial advisors is followed and swift action is taken, if needed.
Size of Advisory Firms Aren’t Important
FINRA isn’t concerned whether you are a large financial firm or a small independent financial advisor. They are going to enforce social media compliance for financial advisors through the same practices and procedures. Their main goal is to protect market integrity, and the best way to do that is by enforcing the same policies across the board.
SocialFinServ can help your company or practice remain social media compliant in various ways. To understand more about the practice of social media compliance for financial advisors, be sure to contact us at any time.