Tweeting Financial Advisors? FINRA Rules Apply.

By: Amy Dugdale | Posted: 2009-06-26

Anyone who was around the financial services industry in the early 2000's when registered reps and brokers started using email for business remembers the great debate - "What will FINRA say about email?" Today, there's a new question - "What will FINRA say about Twitter?"

Leave it to great tech writer Davis Janowski (@ddjanowski)of InvestmentNews to clear up FINRA's take on tweeting. According to his recent article, "FINRA doesn't believe it's appropriate to make special rules for each new communication tool that becomes available."

"We are very interested in accommodating new technology, but the challenge is to have rules that are both specific enough to address current issues, but broad enough to accommodate evolving technologies and future developments," said Thomas Pappas, FINRA's vice president and director of the advertising regulation department in Rockville, Md. "If we were to write a rule that addresses something too specific, say Western Union telegrams, it wouldn't have taken long before that rule was deemed obsolete," he said.

That means, in order for reps to keep their tweets on the up-and-up, they'd have to be archived and potentially pre-screened (just like websites and emails), which as one of the story sources observes -basically removes the spontaneous nature of social media (i.e. the whole point) from the equation.

Like I said, great article that answers a question many of us in the industry are asking. Certainly there is no question that new technologies pose compliance risks. Here's my take - we weren't sure how we were going to deal with websites back in the mid-90s, we also weren't sure what would happen with email and IM in the early 2000s, but we figured it out (necessity is the mother of invention, right?). Now another communication method is out there - and it's up to tech vendors like us to figure out what we need to develop in order to make Twitter another tool in the quiver of financial services professionals (and all organizations, for that matter).

Game on.

Testing out Twitter? Follow me at @adugdale (recommended if you like celebrity gossip mixed w/ tech observations) or follow our company @liveoffice (recommended if you're interested in finding out what's going on at our org).

*Edit

Check this out: Great blog post on Twitter and Compliance from Doug Cornelius (blogger & CCO at Beacon Capital).