FINRA and Social Media: What Can You Do?

Content and messaging are key to any business, but how can you stay within FINRA guidelines when using social media?

Forbes took a swing at defining the rules and parameters to staying on FINRA’s good side and had this to say about various messaging platforms:

Text messaging: Text messaging is an important form of marketing. It’s how communications are occurring more and more frequently. May firms and Financial Advisers (FAs) use text messaging for business purposes? Yes, as long as they can maintain business records. There’s nothing inherently problematic about text messaging, provided that the record keeping can be made, which might be a challenge for some firms.

Testimonials: There have been many questions from the industry about testimonials, particularly in the context of LinkedIn, where there are both “skills and endorsements” and “recommendations”. FINRA’s position is that, to the extent that somebody endorses you, your product, or your Financial Advisor’s (FA’s) product or service, and the FA had nothing to do with it, then that wouldn’t consider having been “adopted” by the FA and certainly not “entangled”. However, should an FA reach out and solicit a recommendation from a person or, having received an endorsement, likes the endorsement, then you’ve reached a point at which they have essentially adopted it. It may seem like a very nuanced view, but based on principles that FINRA has articulated, it should be fairly clear that if it’s just an inactive receipt of information by the FA, then there shouldn’t be an issue of having adopted the FA, or the firm having adopted that communication. However to the extent that their activity on behalf of the firm or the FA to embrace that communication, then there would be an adoption and recordkeeping, suitability and supervisory rules apply. This is distinguished from the SEC’s conundrum in respect to the testimonial rule, which simply says that even an indirect reference to an endorsement is considered a testimonial concluded Selman.

Check out the full article for more details on things like advertising, hyperlinking, and more.

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