Social Media: Three Steps to Compliance for Organizations in the Financial Services Industry

In today’s technology-driven society, it is essential for organizations to develop a presence on social media to boost transparency and develop a two-way stream of communications with key audiences, i.e. investors, advisors, employees, clients, stakeholders. Many companies in the financial services sector struggle to find a balance between sharing information over social media while still complying with federal disclosure regulations. Since June, the Financial Industry Regulatory Authority (FINRA) has been conducting random spot-checks on financial services organizations’ compliance to follow these guidelines. By following these three simple steps, as outlined by RegEd, financial institutions can easily meet the terms of FINRA’s social media regulations.

1. Establish a Strong Social Media Policy: Organizations must first develop a robust social media policy prior to launching their social media presence. These policies must be continuously updated to reflect changes in industry regulations and the evolution of technology. The policy should clearly outline a Firm’s social media goals; discuss which social media platforms, i.e. Facebook, Twitter, LinkedIn, align with its business objectives; delegate who is responsible for drafting content and posting to social media platforms on behalf of the Firm; and establish an approval process for content. When drafting social media policy, it’s best to view the document as a business plan that will continue to evolve as engagement increases and the business grows and matures.

2. Provide Frequent Training for Advisors: It is imperative for anyone who will be involved in the drafting and posting of content to be thoroughly trained on best social media practices prior to building engagement. Advisors should be well-versed in the dos and don’ts of what can be mentioned on social media and what content is permissible in accordance with FINRA regulations and the Firm’s social media policy. Training sessions should be held regularly to ensure everyone is knowledgeable of new regulations as they are put in place.

3. Archive All Social Media Activity: Financial organizations must archive all social media activity in order to comply with FINRA regulations. This can be done through periodic reports, listing posts, URLs, time stamps, engagement and any updates. This also simplifies the process of providing evidence of compliance in the case of a FINRA spot-check. 

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