Friday, January 29, 2010

Using social networking sites

It's a brutally cold 5 degrees in Chicago this Friday morning and I'm doing my usual routine of visiting the FINRA website to see what's new. I'm not surprised to find a Notice to Members concerning the use of social networking websites by registered representatives. Obviously, a registered representative can now easily post stock and bond recommendations on his "wall" at Facebook, or--even scarier--post them on all of his friends' walls. Or, maybe he starts a fan page in which friends can "become a fan of Oracle 6% convertible preferred stock," although I'm not sure how many devotees he'd find for that one.

Point is, broker-dealers have to either supervise or pre-approve a registered representative's communications on social networking sites or blogs. I hadn't actually thought of it until just now, but a blog post is "static" and, therefore, considered to be advertising. Advertising has to be pre-approved by a principal, which could really slow down your blog posts, especially if you continue to promote various stocks, mutual funds, or variable annuities. And, your recommendations have to be suitable for everyone who receives them, which seems to open a huge can of worms for the compliance department.
The FINRA notice is at:
It's very easy to read, as it's presented mostly in Q and A format. Enjoy, and study hard. The Series 7 is always looking to flunk 1/3 of all people sitting down to take it. Your job is to end up in the other 2/3s. And, there is still about 2 hours in which you can sign up for today's Friday Free Broadcast at 11 AM Central on TAXATION. See the home page under "Get Free Stuff" to sign up (

No comments:

Post a Comment