FINRA Addresses Smart Phone Use by Brokers
FINRA recently followed up its issuance of Notice 10–06 on social media use with Notice 11-39 that takes on smart phone use by registered advisors.
The regulations, which are approximately eight pages in length, provide some overall policies and then Q and A information. Advisor One provides a very detailed analysis of the regulations, including the distinction between unscripted “interactions” via a personal device and static postings.
One of the more illuminating questions deals with whether firms may allow representatives to use personal communication devices to perform business activities. The answer is yes. But:
the firm must be able to retrieve and supervise business communications regardless of whether they are conducted from a device owned by the firm or by the associated person.
In order to ensure that the business communications are readily retrievable without necessitating the capture of personnel communications made on the same device, firms should have the ability to separate business and personal communications, such as by requiring the associated persons use a separately identifiable application on the device for the business communications.
FINRA is big on record keeping as illustrated above. How the advisor and their employer will segregate personal communications from business communications remains to be seen. Imagine having to constantly filter your business communications from your personal communications on email/twitter/facebook etc. That is not an easy proposition.
As we have discussed, many of the larger wirehouses are slowly rolling out social media programs for their advisors. The archiving and control of business communications will be a challenge as they attempt to harness the flexibility of social media with the rigidness of the FINRA guidelines.
