5 Key Compliance Steps for RIAs Using Social Media

Originally posted on www.seicblogs.com. View original post here.
A few weeks ago, I was participating in our Social Media Lounge at our Strategic Advisor Council national conference and was approached by an advisor. He and his ID-100260269colleagues were interested in getting active on social media, but here’s where he is different from many advisors that I speak with: he’s a Registered Investment Advisor (RIA).
Unlike broker dealer-affiliated advisors, RIAs have to create their own policies and procedures for social media. To make matters murkier, the Securities and Exchange Commission has provided little guidance on social media, but there are some things that are a given.
When I returned to the office, my compliance officer and I jumped on a call with this advisor to help clarify some of the compliance requirements he was encountering and discuss what technologies were available.
Here are some of the key compliance steps we provided to our client that may help other RIAs get up and running with social media. But I would add that the learnings provided here are applicable across the financial advisory industry.
1. Create a social media policy.
First and foremost, you need a document that clearly indicates:

  • Who is approved to use social media, including what training is required to become an authorized user and/or represent your firm online.

  • What channels your company and users will use. Are you sanctioning just LinkedIn for professional use? Or, are you also using other sites such as Facebook, Twitter, YouTube, Pinterest, or Instagram? List them all out.

  • What content you will permit. Document the sources and types of content you’re looking to provide, including whether or not you’re going to share your own firm’s content or articles from around the web, and format types – pictures / text / video, etc. 

  • Your content’s review process. Identify what content will need to be pre-reviewed by your compliance staff member, and what is permissible in post-review. Never, ever share articles or information that could be construed as investment advice with your followers. Remember – social media should adhere to the same communication and advertising standards that apply offline. 

2. Select an archiving platform.
As with other electronic communications, it’s essential to archive your social media activity. A few years ago, this was an obstacle; however, with major archiving platforms now offering this service (Smarsh, Global Relay, Actiance, Socialware, and Hearsay just to name a few), it’s made social media more accessible to financial advisors .Once you’ve selected a firm, it’s a few easy steps to connect your social media accounts by email and authorize an ongoing data connection (API). Many of these firms offer additional services, such as metrics and content distribution – as well as non-social media services, such as email archiving. Select which provider best suits your needs.
3. Collect passwords.
Whether it’s saved in an Excel document on your shared drive, or if you use a secure program such as Adobe EchoSign, it’s good business practice to store your company’s social media usernames, passwords, and email addresses in a central place. That way, if a key employee leaves, they don’t take your social media account access with them. Be sure to change the passwords once anyone who has access to the passwords departs from your firm, as well. A note here regarding passwords – specifically for LinkedIn. Since LinkedIn is both a personal and professional network, collecting passwords is not always required unless the individual is using it primarily to promote their role within your firm.
4. Have a response plan.
Because of the open nature of social media, the responses of your followers can be unpredictable at times. It’s a good idea to identify what topics could prompt a negative or outlandish response in your community – such as a service complaint or market fluctuation – and brainstorm sample replies for those situations. Document those replies, so they are quickly available in the event you need them.
In most cases, you’ll want to reply to the post with a short, simple acknowledgement and encourage the poster to take the conversation off-line where you can address issues further. Removing comments should only be done when absolutely necessary; after all, this is social media, and it can look inauthentic when you censor your readers.
5. Establish and maintain ongoing oversight.
Identify the person who will be in charge of ongoing content review and reviewing your channels to make sure that your archiving connection is in place and channel-specific rules are adhered to by authorized users. For example, for LinkedIn, it’s a good idea to do an audit of your staff’s LinkedIn “recommendations” of job experience. This is an area where FINRA and the SEC have been clear around the interpretation of client testimonials for financial advisors.
Come in, the water’s fine
Setting up the compliance requirements for social media may seem daunting for a financial advisory firm; however, here's additional perspective from fellow blogger Michael Kitces of Nerds Eye View that interestingly says that perhaps we’ve made compliance out to be more of a demon than they actually are.
What social media compliance questions do you have?
Amy Sitnick is the social media contributor for Practically Speaking and also serves as a senior marketing manager for the SEI Advisor Network. www.seic.com

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5 Things Advisors Aren't Doing on LinkedIn but Should Be (Blog post by Amy Sitnick)

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