Compliance Solutions for Investment Advisers

Category Archives: Advertising & Marketing

Social Media – Monitoring

Investment advisers must be able to monitor what their supervised persons are saying about the firm in their social media posts and should be able to monitor what others are saying about the advisory firm.

Social Media – Mobile Devices

Since most social media activity occurs off-site and through mobile phones, advisory firms need to have the capability of applying all their social media policies and procedures to mobile devices.

Social Media – Capture

Advisory firms must be able to capture and archive the posts and tweets of their supervised persons. Firm’s also need to be able to conduct a key word search for problematic terms.

Social Media – Disclaimers

Social media posts are advertising. Any disclaimer that you would typically place on your advisory firm’s web site should also accompany any social media posts. Since the nature of social media is to allow third-parties to post comments, it is also prudent to include disclaimers about statements that are outside your firm’s control.

Social Media – Policies & Procedures

Among top five social media issues for advisers  . . . Written Policies & Procedures Advisory firms must develop a written policy and attendant procedures that outlines, at the very least: The types of social media platforms (e.g., Twitter, Linkedin, Facebook, blogs, podcasts, etc.) its adviser representatives may use; Those adviser representatives (and other employees) that


Yesterday, for whatever reason, I was rummaging around a few adviser web sites and came across one that included a testimonial. How did I know it was a testimonial? Was it my compliance expertise? My familiarity with the nuances of marketing and advertising? My ability to discern the hidden meaning behind the written word? Nope.

SEC Hunting Down Performance Outliers

Make sure you can verify your performance numbers and that you maintain all records necessary to substantiate the performance. The SEC is hunting down performance outliers. If you are posting numbers that wildly outperforms a benchmark the SEC will take an interest and will inquire further.

Marketing Review Checklist

Advertising and marketing will always be a primary area of concern for regulators. Underscoring this is the SEC most recent Presence Exams Letter which listed “Marketing” as its first substantive subject. That letter stated that the Office of Compliance Inspections and Examinations (commonly referred to as “OCIE”) would consider whether an adviser: ” . .

Alert – Social Media

A copy of the SEC Social Media Document Request Letter is reprinted below. Perhaps it is time to revisit your social media policies and procedures.  …………………. DOCUMENTS TO BE PRODUCED Please produce the following documents within Adviser’s possession or custody or subject to Adviser’s control for the period January 1, 2010 to the present: 1.

SEC Lifts General Solicitation Ban on Hedge Funds

Last August, in order to comply with the Congressional mandate to implement Section 201(a)(1) of the JOBS Act, the SEC proposed a rule that would remove the general solicitation ban for certain 506 offerings in which sales of securities would be limited to accredited investors and issuers would be required to take reasonable steps to

Social Media & Testimonials

Whether a third-party statement is a testimonial depends upon all of the facts and circumstances relating to the statement. The term “testimonial” is not defined in Rule 206(4)-1(a)(1), but SEC staff consistently interprets that term to include a statement of a client’s experience with, or endorsement of, an investment adviser. Therefore, depending on the facts

SEC Issues Guidance Update on Social Media Filings

The Securities and Exchange Commission has published a guidance update from its staff to clarify the obligations of mutual funds and other investment companies to seek review of materials posted on their social media sites. The guidance from the Division of Investment Management is the first in its “IM Guidance Update” series, which will offer

What the SEC Has to Say About Performance Advertising

The SEC’s National Examination Program (NEP) examination priorities for 2012 lists marketing and performance advertising as a key focus area. Specifically, the NEP release states: “Marketing and performance advertising is an inherently high-risk area due to the highly competitive nature of the investment management industry. Aberrational performance of certain registrants and funds can be an

State Privacy Laws & Social Media

An increasing number of states are passing privacy laws that conflict with book and record keeping requirements of SEC-registered investment advisers.  If a social media post is considered advertising, an SEC-registered investment adviser is required to keep a record of that post. However, recent changes to state privacy laws prohibits employers from requesting access to

Compliance Challenged by Social Media Innovation

A steady stream of features being added to social media such as Facebook, Twitter and LinkedIn will test financial advisers’ ability to comply with securities law and company policy. LinkedIn’s endorsement feature could inadvertently put advisers in violation of regulations governing advertising in the securities industry, compliance experts say.

Skin in the Game

Because I receive a live feed from the SEC, I get between 6 and 12 SEC press releases every day. Most deal with actions brought by the SEC against a variety of individuals and firms and most are, quite frankly, not worthy of further comment. But once in a while the SEC brings an action

The Perils of Social Media

We all know that there are regulatory issues specific to registered investment advisers’ use of social media. This article from the Wall Street Journal shows that awareness of your employees use of social media should not be limited to regulatory concerns: A Little ‘Like’ Can Mean Big Trouble By  RUTH MANTELL Workers of America, be

Compliance Alert! Social Media

Dear Compliance Professional, Rarely do we see the SEC Office of Compliance Inspections and Examinations issue a National Examination Risk Alert. So when they do, we pay particular attention. Last week, OCIE issued just such a National Examination Risk Alert on Investment Adviser Use of Social Media. The key takeaways from this Risk Alert are:

FINRA Reminds Firms of Their Obligations Regarding the Supervision of Registered Persons Using Senior Designations

FINRA is publishing this Notice to remind firms of their supervisory obligations regarding the use of certifications and designations that imply expertise,certification, training or specialty in advising senior investors (senior designations). This Notice also outlines findings from a survey of firms and highlights sound practices used by firms with respect to senior designations. Firms are encouraged to

Social Media

Following a recent survey of state-registered investment advisers, the Massachusetts Division of Securities has determined that additional regulatory guidance concerning the use of social media is necessary. The Survey required responses to a variety of questions as to each investment adviser’s use of social media (including Facebook, LinkedIn, Twitter, as well as other media), the