Filed Under:Annuities, Suitability

State to "Tweet" new social media reg

Are you a registered investment advisor (RIA) or RIA representative in the State of Massachusetts--or in any state, for that matter? Do you use social media aggressively in communicating with prospects and clients? Then you may want to assess your social media practices in preparation for new guidance coming out of Massachusetts and possibly other states in 2012.

Here's the situation. In late July, the Massachusetts Securities Division announced it will be issuing new social media guidelines and best practices standards next year. Reason? A survey of 576 advisors revealed that 44 percent currently used at least one form of social media to promote their business.

Advisors using these tools spanned all demographics, with the youngest being 23 years old and the oldest, 78. Most of the advisors surveyed said they used LinkedIn (41 percent), followed by Facebook (14 percent) and Twitter (8 percent).

Although the study found that social media usage was broad, compliance remained spotty, despite last year's FINRA guidance (10-06 Regulatory Notice).

Specifically, the study found that:

  • 57% of advisors did not retain the content of their posts.
  • 68% had no written policies regarding social media use.
  • 52% did not currently monitor or review the social media content posted by employees for business purposes.

Based on these results, the division decided it was time to issue additional regulatory guidance for Massachusetts-registered investment advisors.

Given the recent shift of oversight from federal to state regulation for investment advisors managing $25 million to $100 million in assets, the State of Massachusetts may be the canary in the coal mine for future social media regulation. A word to the wise: It may be time to assess your social media strategies in light of these new regs.

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