Social Media Compliance

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“Social Media” is one big area where firms question how it should be controlled. Well the answer is, you should not. Social media is for personal use and should be defined as such. Although the regulators are trying to figure this out, here are some practical changes you can make to protect yourself starting today. 


To start, it is hard to monitor your employees personally and in no way should you EVER infer that you will. You should have a policy in place that employees should never use the company name or talk about the company when on social media sites. Social media, from what I read, is seen as advertising, and I have to agree. This includes any opinions an employee might have about the company or any of their products. Two items that regulators do not like are testimonials and performance information. An employee may talk about how great a company is and how well they treat their clients; this would be considered a testimonial and therefore a violation. Performance also is being heavily monitored, so talking about how well the firm’s model portfolio has done over the years would be considered a violation.

Employee Trading

Insider trading is another potential problem. Employees may talk about securities while on social media sites. Where did the employee get their information: Are they talking about securities the firm is trading? Are they talking about client portfolios? Who are the employees sharing this information with? All of these questions are potential violations and therefore talking about specific securities in a forum may create some problems for the firm.


Advisers getting together and manipulating the market is a concern for regulators. How a few independent advisers can impact the market, I am not sure. But avoid talking about specific securities in a meeting, conference and on social media sites. 

Personally, I am on LinkedIn and other social media sites. I normally talk about compliance and technology—so fairly harmless. When I do speak about investments, it is always about allocation, planning or the economy. I never speak about a specific security. 

I would suggest adding language to your Code of Ethics to encompass the following:

  • Social media sites are for personal use only. 
  • You should not discuss any information about the firm, nor use the firm’s name in a discussion. 
  • Never discuss information about, but not limited to,
    • Client information
    • Specific securities information or opinions
    • Performance information
    • Any marketing information related to the firm 

Ash Bhatnagar, CFP®
RIA Independence Co.
Princeton, N.J.

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