Wednesday, December 31, 2008

Compliance makes social networking tougher for registered reps than RIAs

Here's a guest post by Bill Winterberg, CFP®, an operations and efficiency guru to independent financial advisers, who blogs at FP Pad. He made me realize that RIAs have more leeway than registered reps when it comes to social networking.

Websites like Twitter, LinkedIn, and blogs present compliance issues for registered representatives subject to FINRA regulations. All reps must obtain approval from the broker/dealer compliance department before posting anything on the Internet, as postings are considered advertisements.

FINRA has published guidelines for use of the Internet by registered representatives of broker/dealers. It's worth reading if you are affiliated with a broker/dealer.

The SEC has similar guidelines that govern advertisements, including postings to public Internet forums. However, investment advisers are generally responsible for self-supervision by Chief Compliance Officers. In my opinion, investment advisers not subject to FINRA regulations have quite a bit more flexibility when using Internet and social networking websites. See and

RIAs definitely have more flexibility over registered reps when it comes to the use of the Internet. However, common sense must always prevail when using the Internet to avoid publishing security recommendations or any testimonial, which are explicitly prohibited by the SEC and state regulatory authorities.

Susan B. Weiner, CFA
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Copyright 2008 by Susan B. Weiner All rights reserved


  1. Thanks for the clarificaiton. I am an IAR for an RIA as well as a RR and any e-mail going to multiple addresses needs compliance pre-approval and this strikes me as short e-mails.

    Since everything I send out requires a standard disclaimer, and that in itself is more than 140 characters I think I am SOL.

  2. Anonymous,

    Yes, sounds like the disclaimer kills your chance of getting on Twitter.

    But I wonder if a short Tweet that links to a web page with the rest of the Tweet and your disclaimer would pass compliance. Still, that seems like an awful lot of work. Probably not worth your effort. A blog might be a better way to try social networking.


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