3 Social Media Considerations for Your Firm

With the implementation deadline of the new SEC Marketing Rule fast approaching, there are many factors investment advisory firms need to consider. Social media has become a powerful marketing tool for investment advisors to put themselves in front of more potential clients. Below are a few key points Investment advisors should take into account for the use of social media marketing.

Posting on company pages

Almost every investment advisory firm today has a company social media page. Whether it be a LinkedIn page, Facebook, Twitter, etc., there are many questions a firm should ask before posting content. Some may include:

  • Does the firm have Policies and Procedures around being compliant with the Marketing Rule?
  • Who will be composing the social media posts?
  • When should content be posted?
  • Is there a requirement for preapproval before content is posted?
  • Does the firm have a vendor to archive all social media posts?

These are just a few examples of things that investment advisory firms should take into account regarding social media marketing.

Use of personal social media accounts

Another aspect of social media marketing is how firms will allow their employees to post on personal accounts. Firms need to be sure that anything an employee posts on a personal account won’t conflict with Policies and Procedures. Implementing training can have a huge impact on ensuring employees have proper knowledge of what content should be posted. Firms should also consider periodic reviews of employee social media accounts to confirm there are no firm policies and procedures violations.

Importance of Proper Disclosure

As with every other aspect of an investment advisory business, the importance of having the proper disclosures listed can not be overstated. Social media marketing makes this particularly difficult as many social media platforms only allow a limited number of characters per post. To get around this, the SEC allows for a link approach where you attach a link to each post which will direct client or prospective clients to a list of applicable disclosures.

Navigating this transition for the new marketing rule can be daunting. With the new doors it opens, it leaves a firm vulnerable to risk from many different angles. Working with an experienced compliance team is essential for navigating the unknown, like social media and the new marketing rule. For any assistance with the new marketing rule and the impacts it may have on your firm and your compliance program,  contact the team at Core Compliance at (619) 278-0020 or schedule your strategic consultation today.

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