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The SEC is at it Again: What Financial Advisors Need to Know of a New Substantial Change


The SEC is at it Again: What Financial Advisors Need to Know of a New Substantial Change

The SEC is at it again!

The Securities and Exchange Commission wants access to what they consider is an advisor’s full risk profile…and this includes social media profiles. Advisors need to be aware of this substantial change. This affects the filing of form ADV, additional reporting requirements, and how you can be prepared now for what is to come. You have until Oct 1, 2017, to be prepared so there is no time like the present, right?

“What does form ADV do?”

Investment advisors use the form to register with the Securities and Exchange Commission, register with one or more state securities authorities, and amend those registrations. [It’s regulation form, a real yawner, I know.]

So, what about the filing will change?

The update has to do with Section 1.I (like India) of Schedule D. (Final ruling is found here: The current form asks you to list your website address (and FYI: you must have a separate form for EACH website address). Right now it looks like this:

I do not have a screenshot of the new form, but basically, it will not only ask you for your website (like above), but you’ll also be asked to provide all your corporate social media accounts. This means Facebook, Twitter, LinkedIn, etc. Ok, not too bad so far – right?

Why do I need to care about this? 

One, we want to be sure you file your forms correctly, but more importantly, it really speaks to the extra eyeballing we can expect social media accounts to come under with this additional reporting item. Today, compliance requires you to archive and retain your social media posts and content. (If they don’t, they likely will have a stronger arm on this now more than ever before. Expect the shoe to drop!)


Are you archiving yet?

Not all archive software is built alike either. If you’re using more popular platforms such as Actiance, Hearsay, Smarsh, FMG Suite, etc. you will have fewer worries when your accounts are audited. I’m sure there are other archive/retention platforms out there, but these four are the ones I come across most often and have the most familiarity with their inner workings.

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