What SEC Social Media Guidance Means for You
April 22nd, 2014
by Kristen Luke
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Advisors may now be able to claim their Yelp profiles and use them for marketing purposes.
Recently, the Securities and Exchange Commission (SEC) published new testimonial and social media guidelines (SEC IM Guidance Update 2014-4) that cleared the way for advisors to use social media review sites like Yelp and Angie’s List. Such sites were previously restricted because they provided content that was generally seen as testimonials. While the new guidance may seem like a big leap forward for financial advisors who use social media, there are still many restrictions, so it is important to understand what you can and cannot do.
To understand what the SEC’s guidance means for you, you must be aware of some key passages from the SEC IM Guidance Update 2014-4. While I’m not a compliance expert, here is my understanding of the document. Consult your compliance officer or attorney prior to implementing any social media campaign.
If you can control the reviews, you can’t use it
If you have the ability to control the reviews on a site in any way, then all reviews on the site are considered testimonials and you cannot use the site. But sites that show all reviews – the positive and the negative – and do not enable you to delete or hide reviews, such as Yelp, are now acceptable.
Here is the SEC’s guidance: ”When an investment adviser or IAR has no ability to affect which public commentary is included or how the public commentary is presented on an independent social media site; where the commentators’ ability to include the public commentary is not restricted; and where the independent social media site allows for the viewing of all public commentary and updating of new commentary on a real-time basis, the concerns underlying the testimonial prohibition may not be implicated.”
|Can You Use It?|
|Yelp||Facebook Business Page Reviews||LinkedIn Recommendations|
|Angie’s List||LinkedIn Endorsements|
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