New SEC Rules Increase Social Media Disclosure Requirements for Investment Advisors

On August 25th 2016, the SEC announced that it adopted amendments to the Investment Advisers Act that will increase the record-keeping and reporting requirements for investment advisors. Advisors will now have to provide additional information on their separately managed account business, and other aspects of their business, including the use of social media.

Advisors should start preparing now for the form revisions, especially if they do not currently have a social media archiving solution in place (two social media archiving solutions we like: Hootsuite and Smarsh)

What Is the Change?

These latest amendments are an expansion of last year’s amendment that required social media account addresses to be included on the Form ADV. Starting October 1, 2017, not only will investment advisors need to report all their websites and social media account addresses, but now they must also report their most current use case of these social media accounts and websites on Part 1A of the Form ADV.

What Does This Mean For Advisors?

Up until now, advisors only needed to list their corporate websites on Form ADV. However, advisors are now also required to list all of their company social media pages on Form ADV.

This requirement includes corporate social media pages and other publicly-available, business-related profiles on LinkedIn, Twitter, Facebook, Google+, and any other social media platform. The information reported will only affect accounts that the advisors control, and not accounts where the advisor does not control its content (such as Yelp or Angie’s List). Employees that are not regulated also are exempt.

The fact that this new SEC amendment specifically includes social media implies that the SEC will more heavily scrutinize an advisor’s corporate social media accounts during an examination or audit, like the regulator does with corporate websites. This one change in particular signifies a big shift in the way that the SEC will approach and evaluate an advisor’s risk profile.

How Should Advisors Plan to Meet the New SEC Requirements?

For investment advisory and asset management firms, it is now more crucial than ever to have the proper monitoring and recordkeeping tools in place to ensure you are compliant and have the proper oversight of information shared on all digital marketing, including your website, blog, and social media.

Most advisors are already familiar with the need to disclose and archive their company websites and blogs (Twenty Over Ten archives all website content, changes, and blog posts automatically). However if you are not currently archiving all website changes and blog posts, or do not have the proper approval and compliance process in place, you should start there first.

Advisors and managers should revisit (and if needed, increase) oversight and compliance practices, including archiving and supervision of all corporate social media accounts. If your firm is regulated by the SEC and is active on social media but not currently archiving your social media posts, you should develop a plan to put a social media archiving solution in place. Again, two social media archiving solutions we like: Hootsuite (see our guide here) and Smarsh.

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The Scoop on Testimonials on Advisor Websites and How To Use Hootsuite, Five Steps for Advisors

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Sources: SEC, SEC 17 CFR Parts 275 and 279, Smarsh Blog, Hearsay Social,