Financial Advisors on LinkedIn Must Manage Their Compliant Messages


Financial advisors on LinkedIn must make certain their messages comply with Federal regulations. Most of us can go through our day without giving a second thought to the messages we receive and send on LinkedIn. We send birthday wishes, congratulate others on their recent promotion and share content we’ve created and content we’ve curated. Added to this mixture of messages we occasionally send something a bit more sales oriented. Maybe we’ve found a prospect in a LinkedIn Group and we want to tell them about our product, or the services we offer. No worries, that’s what LinkedIn is for, right? 

Well, “Yes,” that’s what LinkedIn is for, if you’re the average business person using LinkedIn strategically to grow your business. But, Financial Advisors on LinkedIn must make certain every communication sent, complies with Federal Regulations.

Financial advisors on LinkedIn

It’s Tough To Keep Up With Ever-Changing Platforms 

Compliance on today’s Internet can be challenging because almost every week a digital network changes something. It might be a privacy policy or a network’s Terms of Service. Or, it might be a feature that goes away of comes into existence. Remember back when LinkedIn introduced Recommendations and Endorsements? Remember when you used to be able to connect to another LinkedIn member because you were in the same Group. Things change fast and often online, forcing the Securities and Exchange Commission (SEC) to acknowledge the difficulties in keeping up with the technology as the use of social media in the financial services industry increases at a rapid pace. 

In response to these changes, the SEC is constantly updating, modifying and promulgating new Rules. An example: The SEC’s Rule 204-2(a)(7) requires financial advisors to maintain records of all communications between themselves and their clients. Back in May, the SEC proposed  a modification to Rule 204-2 that “would require advisers to maintain records of the calculation of performance information that is distributed to any person.  Currently, advisers are required to maintain performance information that is distributed to 10 or more persons.  The proposed amendments also would require advisers to maintain communications related to performance or rate of return of accounts and securities recommendations.” 

Certainly this change in Rule 204-2 effects Financial Advisors on LinkedIn. An update on LinkedIn made by an advisor with more than 10 connections would fall under this Rule change. So, Financial Advisors would be wise to seek guidance from their compliance officer to determine if the firm has a policy about messages on LinkedIn. Financial Advisors would also be wise to completely understand the tools their firm uses to maintain communications between advisors and others via social platforms like LinkedIn. And, they would be wise to be using one of the many cloud-based tools developed just for this purpose.

Electronic Communications Compliance

Many products exist in today’s market to assist Financial Advisors with their need to comply with Federal Regulations. Three of the better known vendors include: Smarsh, Actiance, and Hearsay Social.

LinkedIn has worked hard to make it easier for Financial Advisors to participate in its network. In 2014 they rolled out their Compliance Partners program and these three vendors are among the group participating in the program today. Members in the program must provide a tool that maintains communications in a fashion that is deemed compliant by the SEC and FINA regulations.

If your firm uses one of these “compliant” tools, Financial Advisors on LinkedIn can rest easy. Not only do these tools maintain and archive messages between you and your clients, they also maintain and archive LinkedIn updates, videos and content you post on the network.

Our clients have found LinkedIn to be an incredibly powerful tool for communicating with prospects, clients and possible referral sources. 

Financial Advisors who take their obligations seriously, are in-step with their compliance officers, are well-versed in the SEC and FINRA regulations and are using LinkedIn to its full potential.

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