The SEC recently released a National Examination Risk Alert regarding investment advisor use of social media. Don't be alarmed: Compliance and regulation parameters have not changed. The SEC is simply offering financial professionals some valuable advice that is definitely worth reading and considering.
Here are 4 key observations from the report:
1) Overlapping protocols that apply to advertisements, client communications or electronic communications, which may or may not specifically include social media use.
2) Confusion about which procedures or standards apply to social media.
3) Lack of clarity among staff regarding the types of social networking activity that are permitted or prohibited by the firm.
4) Inattention among staff regarding the use of social media by solicitors.
Source: Amy McIlwain, president of Financial Social Media, www.financialsocialmedia.com.
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