3 Steps to Navigating Social Media Compliance for Financial Advisors
Social media offers financial advisors an invaluable platform for connecting with clients and expanding their reach. Yet, for advisors in a highly regulated industry, navigating compliance on social platforms can present unique challenges. As a follow-up to a recent WealthManagement.com webinar, Magdalena Johndrow, CFS®, CDFA®, and Dylan Ripley, AAMS®, two experienced financial advisors, share three essential strategies they've used to maintain social media compliance.
1Establish a Collaborative Relationship with Your Compliance Team
Maintaining compliance on social media starts with developing a strong working relationship with your Compliance department. "Every Compliance department is different," shares Johndrow. Meeting with your Compliance team is crucial for understanding the specific "do's and don'ts" of social media, including which profiles require monitoring and what types of content need preapproval.
For instance, business profiles tied to your firm must adhere to compliance standards, requiring approval from your broker/dealer or registered principal. Static content, such as long-standing material on your profiles, generally needs preapproval, while interactive communications like posts or tweets may not—though they still require oversight.
"Understanding items that likely won't be approved in advance—like the use of certain emojis—and knowing what type of content doesn't need approval—like general market commentary—can save a lot of headaches," Johndrow explains. Additionally, ensuring proper record-keeping of all social media activity and using disclaimers where necessary can help avoid compliance pitfalls and keep your content in line with regulatory standards.
2Develop a Streamlined Review Process
Johndrow's firm batch creates content once a week, which "includes recording all our informational videos and trending reels. We also have our photos taken three times a year so we have fresh images to share for several months." She adds, "We then upload everything to our Compliance team through an online portal. They provide us feedback promptly, and we then either make changes and resubmit, or we can approve all suggested edits to the posts," she explains.
Ripley echoes the importance of proactive communication. "I'll send all content days ahead of when I need it posted. If things are moving quickly and I need to post ASAP, I’ll ask them to put a rush on the review." He notes that his Compliance team has a "commonsense approach and speed of review" that enables him to maintain a consistent social media presence—often with a quick 24–48-hour turnaround.
3Adhere to FINRA and SEC Guidelines
Compliance with FINRA and SEC regulations—FINRA regulates broker/dealers, while the SEC oversees both broker/dealers and RIAs—is a critical consideration for financial advisors navigating the social media landscape. Advisors must ensure their content adheres to strict guidelines regarding disclosures, testimonials, and other regulatory requirements.
Advisors should work closely with their Compliance teams to understand the specific regulations that apply to their firm and industry.
A Compliance-Driven Approach to Social Media
Navigating the compliance landscape of social media may be complex, but with a thoughtful, compliance-driven approach, financial advisors can transform it into a vital business development tool.
By strategically integrating compliance into their social media practices, advisors can not only strengthen client relationships but also enhance their credibility and trustworthiness. This approach ultimately unlocks social media's full potential, turning it into a powerful asset that supports long-term business growth.
FREE DOWNLOAD
How to Evaluate Your Potential Partner Firm's Compliance Team
Access key steps you can take to strengthen your compliance approach and choose a partner that matches your firm's unique needs.
These hyperlinks are being provided as a courtesy and are for informational purposes only. We make no representation as to the completeness or accuracy of information provided at these websites. Please consult your member firm’s policies regarding social media prior to utilizing the features discussed.
Communications must be fair, balanced, and complete without omitting material information.
Avoid false, misleading, promissory, exaggerated, or unwarranted claims.
Predictions or projections on investment performance are generally prohibited.
Material information must be presented transparently and accessibly.
Content must be appropriate for the intended audience.
Broker/dealers cannot link to third-party sites containing misleading information and must supervise and archive business-related social media communications.