financial services

Financial Compliance & Social Media: What Your Marketing Team Must Know

financial compliance social media

It’s 2024, and virtually every business needs a social media presence. But if you’re posting for a fintech or financial services firm, you’re going to have a rougher go of it than most.

Why? Because your business is subject to rules and regulations that the average business marketer isn’t.

In the investment world, the Financial Industry Regulatory Authority (FINRA) is in charge. The not-for-profit organization is overseen by the Securities and Exchange Commission (SEC) and exists to make sure that the broker-dealer industry operates in a fair and honest manner — including in its marketing efforts.

Social media is not exempt from FINRA’s rules, and for good reason: 48% of Gen Zers and 42% of millennials use social media as their primary source of investing information. This makes it even more important for financial services to remain compliant even in “looser” environments like social media sites.

If you want to keep your business on FINRA’s good side, here are a few things to keep in mind.

Best Practices for Financial Compliance

1. Keep Impeccable Records

FINRA requires businesses and their registered representatives to archive any communication relating to their “business as such” for at least three years. And for the first two years, those copies must be kept in an “easily accessible place.”

As it relates to social media, that doesn’t mean just your business’s posts. It also means public comments appearing on your business’s page, and even direct messages (DMs).

(Note: These rules only apply to an associated person’s business use of social media … but not their personal use.)

2. Understand the Review Process

Under FINRA regulations, a registered principal (someone who holds a position of management in the investment firm) is required to review and approve most static content on social media. They’re typically not required to review interactive communications on social media, which tend to be in real-time, as long as those uses are supervised similarly to how the firm supervises correspondence and institutional communication.

Because compliance is so crucial in financial services, any team member with access to the firm’s social media accounts should go through an employee training program to ensure that all policies and procedures are followed to the letter.

3. Fully Vet Third-Party Websites

Whether you’re sharing content directly from a third-party website or linking to content you’ve created that has backlinks to third-party sites, it’s important that you fully vet the sites you share from.

Avoid even the faintest of red flags. That’s because by sharing third-party content, you’re effectively indicating that you endorse it. And if you somehow help with the third-party content, the firm has become entangled with it.

4. Protect Your Brand Identity

Your firm’s reputation can be compromised on social media in a variety of ways. From spoof accounts to posts and comments made by unscrupulous people to fraud and hackers, there’s no real way to absolutely guarantee that your brand’s identity is safe.

Proper use of social media monitoring tools, regular social media audits, and a good crisis management plan are all fantastic ways to help mitigate risk and safeguard your firm against disaster.

5. Pay Special Attention to Influencers

Social media influencers can be a great way to get the word out about your firm, bring in new business and lend credence to your brand. But influencers in the financial services industry require more oversight than those touting the newest kitchen gadget or hottest fashion trend.

Dive deep into their own socials and look for anything that might indicate a compliance or reputational risk. Make sure they’re fully on board with your policies and procedures. And keep records of all communications. Also note that any posts and comments from influencers are required to be labeled as ads.

Compliance Is Crucial on Social Media!

In the financial services industry, compliance is a big deal. Even a small slip can cause lost clients, a damaged reputation, and even disciplinary actions like stiff fees and suspensions. It’s not a risk that you want to take!

At Mischa Communications, we specialize in financial services marketing. You don’t have to do this alone! Let us help carry some of the load.