There’s this perception that it’s easy to promote a business in social media. But it’s not like that for everyone or every company. If you’re in finance, insurance, or other regulated industries, there are social media compliance rules that must be followed, which makes tasks like tweeting and social media updating subject to rules of regulatory bodies.
Rewards Outweigh Risk
Rules of social media regulating bodies can be discouraging, but the fact is that it’s not only ok, but really important for regulated industries to take a proactive and participatory role in social media. There are risks, foremost of which is negative publicity which can spread quickly online. One mistake can do much damage.
In spite of the risk, there are also rewards, which include more confidence in building your social media strategy and knowing the grey areas or danger zones to avoid that can give you trouble. The Financial Industry Regulatory Authority (FINRA) Inc. for example, does not permit testimonials by broker-dealers. This rule is echoed by the Securities and Exchange Commission (SEC). FINRA and SEC guidelines on social media for securities firms and brokers may be found in the Compliance Requirements and Social Media Usage: FINRA and SEC.ulatednce and
As a firm under FINRA, you are also subject to scrutiny and checks by the Advertising Regulation Department which requires the provision of specific information relating to your social media campaign. It pays to know and be familiar with the interpretation of the FINRA rules, filing requirements, and to also be educated about compliance issues and how they can impact social media participation.
The FINRA site is a great place to start, where details about training conferences, events, boot camps, webinars, and courses are provided for education together with checklists, templates, and forms—tools and references available to industry professionals. As a general rule, FINRA treats members’ use of all social media sites for business as just like other business-related electronic communications.
What you say can easily spread online, such that a non-official statement can get picked up by the public and be posted online in no time at all. If your statement is negative or controversial in any way, and you are quoted on this, then you can become liable.
The National Association of Insurance Commissioners (NAIC) in its 2012 report “The Use of Social Media in Insurance” warned insurers and producers that they could be held liable even for third-party posts “due to the “entanglement theory” and/or the “adoption theory.” Participate, but even when not participating in social media, you must still be conscious of what you say about your industry especially if you’re in finance.
BTD helps our clients navigate compliance issues in their industry to use social media to their marketing advantage. Our clients, Loudoun Insurance Group (LIG) and Capital Fiduciary Advisors (CFA), have enjoyed success building their reputation online and handling compliance issues. One tip is to keep tweets and other information posted online focused on the community involvement of clients and stay far away from giving provider-client advice online.