In our previous blog post, we discussed FINRA notice 10-06 and its implications relating to the use of social media by financial advisors and broker-dealer firms. We discussed at length how important it is for financial advisors to be careful about social media so as to not run afoul of FINRA and SEC rules. This post continues with a discussion of FINRA Notice 11-39.
Notice 11-39 covers some of the same ground as the previous notice, offering a bit more detail in several key areas. It also addresses concerns the previous notice did not. As for the scope of the new Notice, it is essentially the same. The notice is intended to provide adequate guidance to financial advisors and broker firms about how social media can, and cannot, be used within the realm of financial services.
Like FINRA Notice 10-06, this follow-up notice deals with five key areas. There is some overlap between the two notices. Where the overlap occurs, Notice 11-39 offers clarification. The five areas covered are:
By issuing the new notice, FINRA was able to clarify some points that were rather ambiguous in the previous notice. However, it is still possible that some confusion remains. Financial advisors should consider contacting FINRA for clarification as well as downloading appropriate documents, including PDF copies of both notices. The notices are available on the FINRA website.
In closing this post, it is important that we remind financial advisors and dealer-broker firms of their responsibilities relating to social media use. You already know that the financial services industry is heavily regulated by multiple government agencies, including the FINRA and SEC. The many rules initiated by these agencies tend to be confusing in areas where they overlap. Social media is one such area.
It is never a good idea to engage in social media communications if you are not thoroughly apprised of how the rules affect your online content. It is far too easy to run afoul of the law with just a single social media post. Both advisors and their dealer-broker firms need to tread very lightly and ensure that all rules and regulations are followed. That means maintaining adequate records, supervising how social media is used, being careful about third-party content, and so on.