FINRA – How to stay compliant on the Web

By Robert Van Arlen

Senior Advisory Group


When using the Internet to market your practice, it is important to regard the FINRA standards for online communication.

Whether it’s on Facebook, LinkedIn or just your website’s blog there are a few things you should know.

What type of communication are you participating in? Who is your audience? There are two types of communication that are relevant to the online security and two types of audiences to categorize them.

Tweets on Twitter are considered interactive because individuals can respond back and forth. Twitter is also open to the public. This means that anyone can see your tweets and it is not exclusive.

Your profile information for Facebook is static. This means that your friends online can read it but not interact with it.

Say you setup your website so that you have to be a user with a password to view all of your static content. This would mean that the information is exclusive and not public. Here is a basic guideline to categorize your online content:
  • Static = requires pre-approval or controlled access

  • Interactive = pre-approval not required but monitor closely for content

  • Public = advertisement

  • Exclusive = sales literature

  • Correspondence = email to a single person or existing clients
The best way to prevent malicious content online is to have it pre-approved. Your business may offer other services that do not require approval. However, if it is tied in to other content of this nature, it can’t hurt to send it in. When in doubt, get it approved.

If it is interactive content that does not require prior approval keep public domain appropriate by referring upset customers to telephone calls or other more traditional mediums. This will help keep your public advertisements safe and compliant.

Keeping accurate records of your online interactions is a good idea. In case you are audited you should have a weekly archive of all your online interactions. Sales literature and advertisements must be kept for a minimum of three years, as well as any e-mails and instant messages to the public. The three-year limitation date is based on the last date the advertisement, sales literature or correspondence was used. See SEC Rules 17a-3 and 17a-4 for further details.

Social media tools are a very important step in advancing your business in an increasingly digital world. Facebook, Twitter, LinkedIn and other sites are extremely useful tools for increasing your client base, created better lines of communication and keeping your clients in the know. Being safe and compliant while using social media will ensure that your online business-client relations are pleasant and worthwhile for years to come.