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What’s Fair Game on Twitter and Social Media?

“Circumvent,” “inaccurate,” “oversimplified,” “mislead” and “hypothetical” — these are just some of the words that Putnam Investments recommends advisors avoid using on Twitter. Putman suggests that these key words, among others, are targets of scrutiny by regulators when they evaluate the appropriateness of social media.

Not everyone has the same advice. Michael Kitces, a partner at Pinnacle Advisory Group and publisher of a financial planning industry blog, “Nerd’s Eye View,” says it all depends on context. “Avoiding a list of prohibited words won’t help you if you’re doing something illegal,” he says. “The point is, don’t make promises and commitments that are illegal as opposed to figuring out how to do illegal things without using so-called prohibited words.”

Despite the wavering opinions on this issue, Bill Winterberg, chief executive of technology consultant FPPad, says that FINRA and the SEC scan Twitter for the validity of tweets by advisors, often by searching for certain words that raise red flags, such as the ones listed above. The bottom line, Winterberg asserts, is that advisors not take advantage of consumers or rip them off. The good news that is most advisors using Twitter and other social media are following the rules.

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