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Compliance & Regulation
1
As you put on your blinker and slowly pull to the right,
you realize the police officer is following you, inevitably
to issue you a dreaded speeding ticket. You know you
shouldn’t have been going above the speed limit; you
were just going along with the flow of traffic, after all.
Similar to how we find ourselves driving a little too fast
when everyone else is doing it, the way we communicate
with the public is heavily influenced by the actions of
those around us. Younger generations have had a
significant hand in steering away from written
correspondence toward methods such as e-mail, text and
instant messaging, and social media. But how do you
know when you have the green light to use these methods
with clients? Let’s take a look at how you can keep your
communication compliant and avoid getting a “ticket.”
E-Mail
Green light! But first, you have to pass the required
two-point inspection checklist:
•
Use a Commonwealth-approved hosted e-mail address.
•
Include a preapproved signature, including DBA
name, branch address, phone number, and
appropriate disclosures.
So what sets the speed limit? Commonwealth must retain
and review e-mail communications as required by SEC Rule
17a-4(b) and Rule 204-2 of the Investment Advisers Act
of 1940. Requiring advisors to use a hosted e-mail address
allows us to meet record retention and surveillance
requirements. Keep in mind that e-mail is
not
a confidential
means of communication; therefore, when sending an
e-mail that contains (or has an attachment that contains)
private information, be sure to apply our manual encryption
policy. For more information, visit My Practice >
Technology > E-Mail > Commonwealth Secure E-Mail
Text and Instant Messaging, Forums,
and Chat Rooms
Red light! Although text and instant messaging, forums, and
chat rooms are popular and efficient ways to communicate,
they are prohibited for business communications, as we
can’t capture and maintain a record of messages.
So what should you do if a client sends you a text? Use your
hosted e-mail address to respond to the client and notify
him or her that you can’t communicate via text message.
Clients may text your hosted e-mail account, however, if
they have SMS/MMS functionality. When you respond
via e-mail, the message sends to their SMS/MMS address
instead of their e-mail account. This satisfies your client’s
desire to text while also abiding by your requirement to
communicate through your hosted e-mail account.
Social Media: Facebook, LinkedIn, and Twitter
Yellow light! Social media is a great way to reach existing
and potential clients; however, you must proceed with
caution. The two types of information displayed on your
profile—static and interactive content—have different
approval requirements.
Static content
is any information that remains constant. It’s
defined under FINRA Rule 2210 as a retail communication
and requires preapproval by Commonwealth’s Advertising
Review team.
Interactive content
is any real-time communication—such
as a tweet or status update—and must be captured and
post-reviewed via Erado Message Control Solutions.
ule 2210 also categorizes interactive content as a retail
Green Light, Yellow Light, Red Light:
Managing Communications with Younger Generations
JULIE BURGESS
You’re driving to the office on a Monday
morning, sipping your coffee and thinking
about the first task on your to-do list.
Then you hear it—the fateful sound
of police sirens.
