Finect: Don't Panic Over FINRA Spot-Checks

As regulators spot-check brokerages to ensure compliance with rules governing social media, Finect—the online social media network for financial professionals—recommends that advisors “Keep calm and Tweet on.”

FINRA, the Wall Street regulator, announced the spot-checks this week. ( Click here for FINRA statement). Finect points out that it’s important for financial advisors to understand that the agency is not unveiling new or more burdensome regulations, but merely measuring compliance with existing guidance on social media that it provided the industry three and a half years ago.

“Regulators are not interested in hammering advisors over small missteps in how they use social media,” Finect President Jennifer Openshaw says. “What matters most to them is ensuring that advisors have procedures in place for handling the use of social media in their business.”

For example:

  • Regulators want to see how advisors are overseeing employees who are using specific social media channels. Finect has a compliance module – developed with former Fidelity International general counsel Stuart Fross -- that allows compliance officers to assign permissions to employees governing what social media platforms they may use on Finect (see Compliance Kit)

  • Regulators want to see how advisors handle non-compliant content. Finect provides tools that allow compliance officers to remove offending posts quickly and easily.

  • Regulators want to see systems in place to record all social media posts. Finect archives all content that’s created and pushed out to the social media universe on its platform in a format that simple and easy to access.

“Advisors shouldn’t be spooked by this week’s news on social media spot-checks,” Openshaw says. “Instead, they should see it as an opportunity to review their practices in a channel that will only become more critical to the success of their business in the years ahead.”


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Contact: Sherry Chen

(860) 630-0503