Interview: Carnegie Mellon Professor Ari Lightman On How Students Are Empowered By Learning To Use Brandwatch Consumer Research
By Kara FinnertyJun 10
For most of us, social media provides a more socially acceptable forum to air out our fleeting opinions and emotions.
However, not everyone can fully enjoy the freedoms of whimsical divulgence. Specifically, those working in finance are uniquely bound by a strict set of rules and regulations that limit what they can say and do on social media.
While many groan at the tediousness involved with navigating these rules, in earnest these limitations are designed to prevent improper financial advice or financial malpractice.
These regulations are a reality, but should not prevent the financial world from contributing to the world’s most public forums.
The SEC prohibits any registered investment advisor from promoting testimonials of that pertain to a financial advisor or her work.
When that law was first enacted in the 1940s, it prohibited advisors from printing newspaper ads from clients that had made strong earnings under their guidance.
Now, with the breadth of interactions available on social media, the definition of testimonials gets a little more complicated.
Consider it this way: any social media profile is an individual’s advertisement platform to the general public. Therefore, many firms feel that any client commentary or action that an advisor solicits may be considered an advertised client testimonial. That could include likes, comments or posts.
While advisors cannot promote individual client testimonials on their social media channels, they are now allowed to direct followers to any third-party review site as long as:
FINRA requires that advisors “have a reasonable basis to believe that a recommendation is suitable for a particular customer based on that customer’s investment profile.”
As the audience for any public social media profile is theoretically anyone with access to the internet, advice cannot possibly be based on every possible investment profile – advisors should not post any investment advice.
Additionally, advisors should take care to avoid anything that may be considered implied advice.
Again, some firms will consider likes, shares, comments or posts on any company, service, product or investment to be implied advice.
According to FINRA, if a social media communication “constitutes a business communication,” then the firm is required to keep records of it.
Business Twitter Channels
Business Facebook Channels
The general rule of thumb on social media is to not publish anything that you would not feel comfortable broadcasting to a room full of family, friends and strangers alike.
While these regulations are important, financial advisors should not feel completely stripped of their social media liberties. As long as none of the communications are related to their business, there are no rules against maintaining personal social media profiles. Financial advisors are generally allowed to share, comment or like photos of their clients’ dog pictures or family vacations as they please.
For business concerned about potential compliance issues, comprehensive social media analytics platforms such as Brandwatch can provide automatic alerts on online conversations or mentions that may violate any predetermined thresholds.
If you’d like to learn more about Brandwatch, social media intelligence, or how the platform can prevent compliance violations, simply click the button below.