FINRA (Financial Industry Regulatory Authority) will be examining social media again, convening a Task Force next month to explore use among advisors. FINRA intends to issue more guidance later in the year. Last year, FINRA released its first regulatory notice with guidance on blogs and social networking websites (See FINRA press release).
With more Americans using the Internet and social networking sites growing in popularity, how to regulate has become a big question. Along with more general regulation questions, there is confusion over the responsibilities of firms. In particular, FINRA has stipulated that advisors must archive social media communication for six years. This has lead to a cottage industry of social media compliance solutions for advisors.
linkedFA is a social network for financial advisors to communicate with their investors. Cloud Preservation is a “fully automated web archive service” that claims to easily assure compliance in social media for as little as $15/month. Website Archiving captures screen shots for regulatory compliance.
Advisors are Tweeting up a storm (see AdvisorTweets), sharing information through the web (see Advisors4Advisors), blogging, Facebooking, LinkingIn – exploring the full range of Internet-based marketing options open to other industries.
I’m glad the FINRA will take a closer look at social media and offer clarity to replace the fear about social media that now permeates the financial industry. Advisors, like other professionals, should be allowed to use social media to their full advantage, as long as they are compliant.
Related: SEC Targeting Advisors Without Social Networking Policies, Financial Advisor, 2/22/2011 | How to Embrace Social Media and Stay Compliant, Financial Planning, 1/25/2011 | Companies are adopting Facebook as an official investor forum. See IR web story. |FINRA Guide to the Internet for Registered Representatives