FINRA has announced that they will be conducting spot checks of their firms’ social media policies and usage over the period of February 4-May 4, including:
• How firms are using each social media platform and the business purpose
• Dates when firms started using each platform
• Identity of individuals who used social media
• How these reps are using it
• Supervisory policies and monitoring procedures
• List of top 20 reps by commissioned income who used social media
It will be interesting to see how FINRA adapts to the new world of social media as more investors, especially younger ones, use these outlets to get their information. While email monitoring increased costs and time for firms monitoring their reps, social media can be even more challenging. Possible outcomes: FINRA will adapt; firms will have to increase their costs even as margins are eroding; the medium will be shut down or severely limited; or advisors who leverage social media will look for alternatives.
