Desktop version

Home arrow Sociology arrow The socially savvy advisor

How Do We Create a Social Media Policy?

Regulators expect financial firms with a presence on social media to document the strategies and policies that govern their social media interactions in the same manner that firms must document many other operations within their business, such as training and recordkeeping. This practice is particularly helpful when applied to social media, because it forces the firm to think through the implications of using a new technology – one that can have surprising and sometimes disconcerting effects on operations.

In the appendix to this book, as well as in the companion website (, you can access a model social media policy for your use.

There are a number of different approaches that financial professionals can take when preparing a social media policy. What regulators want to see, and what actually is most helpful to the firm, is a policy that is specific and relevant to the firm itself. It also must dovetail with the firm's own compliance rules.


Here are five good ways to get started with your policy:

1. Address the purpose of social media – Here is where strategy ought to be scrutinized, with a clear description for the firm's employees. Why is your business using social media? What should the reader/user take away after reading the policy? These are all important questions that need to be addressed in the introduction of your policy. In essence, you need to set the stage and make sure everyone is clear on the whys.

2. Define social media – After the why comes the what. What is social media? And with what social media platforms does your business participate? Again, this is important for building the foundation of your social media policy. Don't assume that the employees at your firm who need to know your policy are well-versed in social media.

3. Personal accounts on social sites – Employees are assumed to be representatives of their organization, so it's wise to set up guidelines for how they should conduct and present themselves on their personal social media presence – their Facebook page, their Twitter account, and so on. Ensure that their communications are transparent, ethical, and accurate, and establish guidelines for how employees should engage with clients on their websites.

4. Establish best practices for the various platforms – How should your associates conduct themselves on social media? What are the compliance regulations set forth by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC)? Topics that should be addressed here can include commenting, posting, handling controversial issues, managing confidential information responsibly, and exercising best judgment and ethics.

5. Protocols for crises – Many companies fail to include this element in their social media policy. Let's face it: people are fallible – and it's better to prepare for a crisis than get caught with your pants down when one shows up on your doorstep. Consider the example of NatWest, the bank owned by the Royal Bank of Scotland, which faced a barrage of criticism in 2012 after hundreds of thousands of depositors were unable to withdraw funds due to computer malfunctions.

One related bit of advice: When it comes to crafting a sound social media policy, consider the philosophy espoused by Sharlyn Lauby of Mashable. She suggests “focusing on things that employees can do rather than what they can't do.” Why? Because a social media policy succeeds best when it seeks to leverage the positive.

Michael White, chief marketing officer at Raymond James Financial Inc., notes that social media is an evolving technology – one that calls for a flexible approach to compliance. Social media policies should be “principle-based,” he says, to accommodate dynamic platforms.

For example, LinkedIn developed an endorsement feature subsequent to Raymond James' policy, but the policy already had principles related to testimonials that applied in the new case, White says. Financial professionals should expect the compliance landscape to continue to change where social is concerned.

Social Media Policy

FIGURE 11.1 Social Media Policy

“If your policy is six months old and hasn't been touched, that's not good,” he says. “It needs to be a living document.”

Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >

Related topics