The agent tries to defend his statement, but more and more consumers come forward with horror stories (imagined or real). Soon a Facebook protest group is formed, “Victims of Safe Haven,” which spirals like a recurring nightmare. What started out as an innocent Facebook post turns into an online PR fiasco. Is it any wonder compliance hand-wringers have circles under their eyes?
Still, little by little, they’re coming around. They realize they need to find a way to empower advisors to use social networking sites responsibly. FINRA’s new guidance (Regulatory Notice 10-06) also clarifies things. I suspect the number of securities and insurance companies who allow their advisors to network on Facebook, Twitter and LinkedIn will grow steadily from this point forward.
Having said that, you still have to know the rules. Here are a few to get you started (your state may require more):
- Be careful recommending a specific security. If you do, you may trigger FINRA’s Rule 2310 (on suitability), which may require prior approval and additional disclosures.
- Understand that everything you say on an interactive platform is a “public appearance.” You don’t need to clear your statement, but it must adhere to FINRA content standards of “fair dealing, good faith, balanced,” etc.
- Treat your professional/company LinkedIn and Facebook profiles as advertising. So get it approved before posting.
- Make sure your posted comments are professional. Since they are considered “dynamic” content, they don’t need prior FINRA approval, but they must be fair, balanced, etc.
- If you’re an investment advisor representative, do not solicit LinkedIn client testimonials. That’s illegal.