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The Compliance Dos And Don’ts of Using Social Media in 2024

Oct 07, 2024

To help you make the most of social media without creating compliance concerns with your local SEC office, we’ve aggregated the top dos and don’ts for compliantly connecting with audiences on your favorite social media platforms.

Financial services firms looking to grow and compete in today’s crowded, digital-led landscape often can’t afford to ignore the impact of social media. And while every social platform might not be the right fit, finding your niche and your audience is one of the best ways to get eyes on your firm. 

One set of eyes you do not want to attract? The SEC Division of Enforcement. 

As an adviser, one of the most important things you should be doing when preparing to post online is finding out how to stay on the right side of compliance. 

We have rounded up some of our top dos and don’ts for connecting with audiences on your favorite social media platforms…without connecting to your local SEC enforcement office. 

Do: Keep Up with Changes to Social Media Platforms 

Social media platforms are constantly rolling out changes to their interface, algorithms, and even their name (e.g., Twitter became X). While some of these changes may not impact how you use the platform, it is wise to be aware of what may affect your compliance Policies and Procedures.  

For example, Facebook and Instagram are owned by Meta. Each platform enables users to share posts, photos, and videos simultaneously to their Instagram and Facebook profiles.  

While that function makes it easier for users to update their audiences across multiple platforms, it is important for advisers to be aware of where they’re publishing. Otherwise, you may be posting to one platform without realizing it’s going to another – and therefore not maintaining accurate compliance records. 

Bonus: Understanding the evolution of various social channels can help you determine what platform might be the right fit for your firm. LinkedIn, for example, allows users to publish articles directly to the site, create “carousel” posts, host live sessions, conduct polls, and more. Other platforms, like Facebook and X, allow users to do similar actions. Compared to the standard text, photo, and video posts of the past, your options for creating and sharing content are greater than ever before. 

Don’t: Let your Individual Reps Run Wild on Social Media 

Having a social media presence is an effective tactic for your investment adviser representatives (IARs) and registered representatives (RRs) to establish their personal brand, connect with clients and peers, and showcase their thought leadership. However, the way your individual representatives conduct themselves online must reflect your firm’s compliance standards. And as the compliance officer, it’s up to you to set that standard by implementing – and socializing – your firm’s compliance policies regarding social media use. 

For example, most registered investment advisers (RIAs) and broker-dealers (BDs) will require individuals to keep records of anything work-related that is posted online. Accordingly, team members must be prepared to archive their content and share those records with the compliance team. 

Do: Archive the Right Information 

RIAs need to maintain records and archive all types of communication that happens online – not just the posts they share with their audiences (see SEC Rule 204-2) and the same is generally true for BDs (see FINRA Rule 4511 and FINRA Rule 2210(b)(4)).   

When opting to use social media, that requirement carries over, meaning you’re required to retain records of all communications, written and oral recordings, posts, media, comments, and related content, as it is updated on your social media pages.  

Interested in streamlining your firm’s recordkeeping process? Check out the benefits of automatic archiving for financial services professionals on social media today. 

Don’t: Share Personal or Misleading Information 

While the SEC’s updated marketing rule gives RIAs more freedom to market themselves on social media, including the use of client testimonials and endorsements, they’re still required to follow stringent guidelines and requirements. 

Don’t mislead readers with false or inflated statements, including guarantees (whether express or implied) of portfolio performance. If you’re unsure if a statement is true, play it safe and avoid including it in your content, comments, or posts. 

It’s also important to protect the privacy of your clients and avoid sharing sensitive data about them or your firm. 

In general, it’s a good idea to ask a member of your compliance team or your third-party compliance consultant to proofread your social media posts for any red flags. 

Do: Establish Compliance Rules of Engagement for Your Firm 

To make it easier for yourself and your firm, treat social media just as you would a blog post, brochure, email newsletter, or any other form of print or digital advertising. It should reflect your firm’s ideals while also following any compliance procedures relating to applicable SEC or FINRA marketing rules. 

Financial services firms have some exciting opportunities today and, in the future, to use social media to drive their marketing efforts, build their thought leadership, network with peers, and grow their personal brand. As you work on building out your social media strategy for the coming months, keep in mind regulatory restrictions as well as any compliance policies and procedures your firm has in place – and never hesitate to ask questions if something is unclear. 

Ready to streamline your marketing review process? Speak to an expert to learn more about COMPLY’s solutions today.