An overview of social media for RIA firms regulated by the SEC, state regulators and FINRA.

1. Confident
and
Compliant
Social
Media
for
Advisors
©
Copyright
2013
AdvisorAssist
LLC
February,
2013

2. 2
Social
Media
for
Advisors
Many
advisors
are
jumping
into
social
media
to
communicate
with
clients,
generate
new
business
and
even
service
clients.
However,
many
Advisors
are
oFen
confused
on
how
to
proceed.
We’ll
dig
into
important
topics
on
how
to
uIlize
social
media
in
a
compliant
and
strategic
manner.
©
Copyright
2013
AdvisorAssist
LLC

3. 3
What
is
considered
social
media?
©
Copyright
2013
AdvisorAssist
LLC

4. 4
How
are
advisors
using
social
media?
PromoIng
their
website
DemonstraIng
knowledge
and
experIse
Learning
and
knowledge
sharing
CommunicaIng
with
clients
And
some
have
even
started
to
service
clients
through
social
networks.
©
Copyright
2013
AdvisorAssist
LLC

5. 5
ARendee
Poll
(Social
Media
Webinar,
February
2013)
©
Copyright
2013
AdvisorAssist
LLC

6. 6
Opportunity
to
engage
clients
and
prospects
more
broadly
than
ever
before
The
new
“word
of
mouth”—your
brand
and
message
can
reach
prospecIve
clients
indirectly
More
opportuniIes
to
“humanize”
your
firm
MarkeIng
no
longer
limited
to
markeIng
staff.
All
employees
can
(and
maybe
already
do)
influence
how
your
firm
is
perceived
Engagement
is
now
a
“two
way
street.”
Clients,
prospects
and
compeItors
can
engage
your
firm
in
two-­‐way
dialogues.
Easier
for
audience
to
probe
deeper
into
your
message,
making
clarity
and
consistency
even
more
important
Social
Media’s
Impact
on
MarkeIng
Basic
Tenants
Remain
Unchanged
IdenIfy
and
target
potenIal
clients
with
unmet
needs
that
fit
your
experIse
and
strategic
objecIves
Clear
communicaIon
of
your
unique
value
proposiIon
Importance
of
differenIaIon
in
compeIIve
markets
IdenIfy
methods
and
tacIcs
to
effecIvely
communicate
your
“message”
to
clients
and
prospects
Content
and
delivery
must
meet
compliance
and
regulatory
standards
Strategic
approach
important
to
add
deliberateness
and
consistency
New
Tenants
Created
by
Social
Media
©
Copyright
2013
AdvisorAssist
LLC

7. 7
Social
media
will
not
make
you
a
beRer
marketer.
In
fact,
because
of
the
ease
and
speed
of
social
media,
it’s
just
as
likely
to
make
you
a
worse
one.
Engage
with
purpose.
Define
your
message,
posi>oning
and
brand
first.
Then,
make
sure
that
all
of
your
SM
ac>vity
is
geared
towards
delivering
your
message,
establishing
your
posi>oning
and
reinforcing
your
brand.
Share
and
listen.
(Don’t
sell.)
If
you
come
across
as
a
commercial,
you
will
turn
off
your
audience
quickly.
SM
engagement
is
not
about
selling.
In
fact,
it
challenges
many
legacy
sales
techniques
that
are
no
longer
effec>ve.
Content
is
your
friend.
Create
it,
share
it,
comment
on
it.
Going
forward,
content
marke>ng
is
how
advisors
will
create
awareness,
establish
credibility
and
earn
trust,
long
before
the
first
mee>ng
with
a
prospect.
The
Tenants
of
Social
Media
for
the
Strategic
Marketer
©
Copyright
2013
AdvisorAssist
LLC

8. 8
Recent
Regulatory
Hot
Spots
IARs
vs.
Registered
RepresentaIves
Segment
your
Networks
The
“AdverIsing
Rule”
Third-­‐party
Content
Recordkeeping
and
Archiving
Topics
on
Social
Media
Compliance
©
Copyright
2013
AdvisorAssist
LLC

9.
An
Early
Look
at
a
Regulator's
Take
on
Social
Media
©
Copyright
2012
AdvisorAssist,
LLC
"The
Adviser
has
failed
to
provide
sufficient
and
appropriate
training
to
employees,
to
include
its
investment
adviser
representa:ves
(IARs)
pertaining
to
LinkedIn
and
Facebook."
"There
is
no
evidence
that
the
Adviser
requires
or
documents
prior
approval
of
content.”
"Regarding
the
monitoring
of
the
firms’
Facebook
and
LinkedIn
sites.
The
Adviser
should
consider
how
frequently
to
monitor
third-­‐
party
archiving
sites.
The
Adviser
should
take
into
account
that
many
third-­‐party
sites
may
not
provide
the
level
of
access
needed
by
supervisors
or
compliance
personnel".
"The
Adviser
has
failed
to
address
in
wri:ng,
procedures
for
reviewing
the
adviser’s
fiduciary
du:es
in
seJng
social
website
content
standards,
par:cularly
for
content
that
contains
investment
recommenda:ons,
specifically
the
investment
performance
noted
via
Facebook".
"The
Adviser
has
failed
to
address,
in
wri:ng,
parameters
and
training
for
prohibi:ng
specific
content
or
imposing
other
content
restric:ons
for
its
investment
adviser
representa:ves
to
follow".
"Our
staff
asks
the
Adviser
to
please
provide
an
explana:on
as
to
why
it
does
not
consider
a
"like"
via
the
social
networking
site
Facebook
to
be
considered
a
tes:monial.
If
such
explana:on
cannot
be
provided,
the
Adviser
shall
be
required
to
remove
this
func:onality
prior
to
further
use".
Source:
Thomson
Reuters,
May
29,
2012
The
following
is
a
list
of
deficiencies
cited
by
a
state
securiIes
regulator
aFer
performing
a
review
of
an
advisor.
This
parIcular
advisor
was
acIve
on
Facebook
and
LinkedIn
and
had
contracted
with
a
third-­‐party
vendor
to
monitor
and
archive
their
social
media
acIvity.

10. 10
What
is
an
AdverIsement
under
Rule
206(4)-­‐1?
• LinkedIn
o Your
personal
profile
o Your
business
profile
o Your
status
updates
o Group
affiliaIons
and
discussions
o Content
submissions
(i.e.,
news
arIcles)
o Messages
to
>
than
1
person
o AdverIsements
• TwiRer
o Your
personal
profile
o Your
business
profile
o Tweets
and
ReTweets
o Lists
o Private
Tweets
• Facebook
o Your
personal
profile
o Your
business
profile
o Your
status
updates
o Your
wall
o Content
submissions
(i.e.,
news
arIcles)
o Messages
to
>
than
1
person
o AdverIsements
©
Copyright
2013
AdvisorAssist
LLC

11. 11
• FINRA
released
guidance
again
in
June
2012
to
further
refine
that
Registered
Reps
may
parIcipate
in
social
media
without
pre-­‐approval
of
an
individual
post.
(Regulatory
NoIce
12-­‐29)
• Pre-­‐Approval
by
the
B-­‐D
depends
on
internal
policies
• Formal
archiving
process
and
technology
soluIon
• Principal
review
of
the
use
of
Social
Media
• Adherence
to
17a-­‐4
and
FINRA
Books
and
Records
requirements
Use
of
Social
Media
–
Registered
RepresentaIves
©
Copyright
2013
AdvisorAssist
LLC

12. 12
• Rule
206(4)-­‐1
–
“AdverIsing
Rule”
• No
TesImonials
• Any
communicaIon
to
more
than
one
person
is
an
adverIsement!
• No
formal
system
requirements
for
archiving
but
regulators
expect
to
see
this
in
place
• No
pre-­‐approval
for
any
posts,
unless
firm
policy
Use
of
Social
Media
–
IARs
©
Copyright
2013
AdvisorAssist
LLC

13. 13
What
is
your
biggest
risk
or
concern?
Hint:
It
should
not
be
the
SEC,
the
States
or
FINRA…
Segment
your
networks!
©
Copyright
2013
AdvisorAssist
LLC

14. 14
…It
is
your
buddy
from
high
school!
If
you
don’t
want
to
review
an
embarrassing
moment
with
clients,
segment
your
networks!
Segment
your
networks!
©
Copyright
2013
AdvisorAssist
LLC

15. 15
Any
communicaIon
to
more
than
one
person
(or
is
used
more
than
once)
is
an
adverIsement.
• This
includes
materials
designed
to
maintain
exisIng
clients
or
solicit
new
clients
AdverIsing
must
be:
• Truthful
and
accurate
• Reviewed
and
monitored
• Archived
The
“AdverIsing
Rule”
©
Copyright
2013
AdvisorAssist
LLC

16. 16
An
old
favorite
sIll
applies:
No
TesImonials
• "TesImonial"
is
not
a
defined
term
but
has
been
interpreted
to
mean
a
statement
of
a
client's
experience
with,
or
endorsement
of,
an
investment
adviser.
Don’t
use
“graphs”,
“charts”
or
“formulas”
without
context.
• RegulaIons
prohibit
the
use
of
any
“graph,
chart,
formula
or
other
device
that
suggests
that
it
can
in
and
of
itself
be
used
to
make
trading
decisions
without
prominently
disclosing
any
limitaIons
or
difficulIes
in
use”
• Think
about
how
materials
are
implemented
with
your
clients
and
don’t
imply
that
any
one
tool
or
technique
can
stand
in
isolaIon
Don't
adverIse
specific
past
recommendaIons.
Pre-­‐approval
not
required
for
IARs
unless
firm
policy
states
otherwise.
The
“AdverIsing
Rule”
©
Copyright
2013
AdvisorAssist
LLC

17. 17
Third-­‐party
content
that
is
posted
on
your
social
media
sites
may
include
messages,
forward
links
or
arIcles
Check
with
your
CCO
to
determine
if
your
firm's
policy
allows
for
third-­‐party
posIngs
• Some
firms
limit
third-­‐party
use
to
"one
way
posIngs",
where
IARs
post
on
the
firm's
social
media
sites
but
do
not
interact
with
or
respond
to
third-­‐parIes
• Some
firms
limit
third-­‐party
posIngs
to
authorized
users
only
and/or
prohibit
posts
from
general
public
Third-­‐party
Content
©
Copyright
2013
AdvisorAssist
LLC

18. 18
Don't
communicate
private
info
over
open
networks
If
you
are
both
an
IAR
as
well
as
a
Registered
RepresentaIve
of
a
broker-­‐
dealer,
your
acIviIes
are
subject
to
both
SEC
and
FINRA
rules
and
you
are
expected
to
follow
the
stricter
of
the
two.
• FINRA-­‐specific
rules
are
outside
of
the
scope
of
this
presentaIon
but
can
be
found
in
an
addiIonal
OAC
module.
When
in
doubt?
Ask
• We
train
CCOs
to
be
open
to
this
powerful
medium
and
open
to
new
ways
to
develop
new
business
and
serve
clients
using
social
media
• Don’t
rely
on
the
“I
saw
someone
else
doing
it”
test…
Some
AddiIonal
Items
to
Remember
©
Copyright
2013
AdvisorAssist
LLC

19. 19
CCOs
are
obligated
to
maintain
records
of
any
social
media
acIvity
that
may
be
deemed
a
"required
record”
for
five
years
following
the
last
year
it
was
used.
Rather
than
making
this
determinaIon
on
a
case
by
case
basis,
most
RIAs
have
adopted
an
overarching
policy
of
archiving
all
social
media
communicaIons.
IARs
and
RRs
may
not
alter
any
sevngs
within
social
media
sites
that
may
interfere
or
preclude
your
firm
from
archiving
communicaIons.
IARs
and
RRs
may
not
destroy
or
alter
any
communicaIons
aFer
they
have
been
posted
on
a
social
media
site
(i.e.
an
aRempt
to
alter
archives)
Recordkeeping
and
Archiving
©
Copyright
2013
AdvisorAssist
LLC

20. 20
Social
media
is
an
incredibly
powerful
medium
to
efficiently:
• Build
brand
awareness
• Demonstrate
knowledge
and
experIse
among
your
audience
• Communicate
with
prospecIve
clients
• Deepen
relaIonships
with
and
serve
your
exisIng
clients
Embrace
Social
Media
with
Confidence
©
Copyright
2013
AdvisorAssist
LLC