Investments Advisers on LinkedIn: Are You Compliant with SEC and Your Corporate Guidelines?

If you are an investment adviser, you probably have received some guidance from your compliance officer regarding your social media, including your LinkedIn profile. If you have not received specific guidance or you have not reviewed the SEC’s Guidance No. 2014-4, talk to your compliance officer. In addition to SEC’s Guidance No. 2014-4, obtain the company’s policy regarding static and dynamic content on LinkedIn.com. I’m not attempting to provide legal advice or tips. However, I’ll share a few things to consider and potentially discuss with your compliance officer or legal adviser concerning your LinkedIn profile.

Static Content vs. Dynamic Content on LinkedIn

Static content is the content on your LinkedIn profile page that does not change frequently, such as your summary, experience, education, and organizations. It is often advised that an investment adviser’s profile should be approved by a registered principal of the firm or the firm’s compliance officer prior to posting. Dynamic content changes frequently and this includes InMail to other LinkedIn members, LinkedIn status updates (posts), endorsements or recommendations of others, and comments of other members’ posts. These may not require advance approval. Talk to your compliance officer regarding requirements to archive certain types of dynamic content on LinkedIn, such as InMail messages. Also, ask about posts that you share to groups. Sending messages to or sharing posts with a number of people may have different implications.

Endorsements and Recommendations

There are long-standing rules, established by the SEC, forbidding investment advisers from promoting client endorsements. In the age of social media, these issues had to be addressed to keep up with the times. SEC’s Guidance No. 2014-4 (Guidance on the Testimonial Rule and Social Media) informs compliance officers on the subject of LinkedIn endorsements and recommendations. One interpretation is that an investment adviser should not solicit clients to endorse or recommend them on LinkedIn. LinkedIn endorsements and recommendations should be avoided.

How to Avoid LinkedIn Endorsements & Recommendations

There is the easy way and the more time-intensive way. The easy way, which many investment advisers adopt, is to opt out of the endorsement tool on LinkedIn. To opt out of receiving endorsements: Move your cursor over “Profile” at the top of your LinkedIn homepage and select “Edit Profile.” Scroll down to the “Skills & Endorsements” section and click anywhere in the section to edit. Select “No” next to "I want to be endorsed.” Click “Save.” This action will prevent your connections from endorsing you, hide all of your endorsements, and prevent endorsement suggestions from displaying on your profile when others view it.

The other option is to review your endorsements on a case-by-case basis and choose to “unhide” it or “hide” it. This allows you to keep endorsements from connections that are not clients and for skills not related to financial services. To “hide” an endorsed skill: Move your cursor over “Profile” at the top of your homepage and select “Edit Profile.” Scroll down to the “Skills & Endorsements” section and click the Edit icon next to any of your skills. Click the “Manage Endorsements” link next to “Add & Remove.” Click a skill in the left column to reveal the connections who endorsed you for that skill. You may need to use the scroll bar on the right to view skills further down in the list. Uncheck the box next to any people whose endorsements you want to hide. Again, check with your compliance officer as some firms have adopted a strict “no LinkedIn endorsements” policy.

Recommendations on LinkedIn are customized recommendations written by someone about you. You have the ability to review and accept a recommendation before it is publicly posted on your LinkedIn profile. An investment adviser should not accept any recommendations on LinkedIn. Many investment advisers include a statement in their LinkedIn profile Summary section indicating that they will not accept recommendations or endorsements.

Links to Third-party Sites

Often on LinkedIn, we link to content on third-party sites. Carefully consider this in relation to the 2014 SEC guidance. One interpretation of the guidance is that investment advisers should not link to commentary on a third-party social media site unless they can demonstrate all three of the following.

  • The adviser has no ability to affect which public commentary is included or how the commentary is presented on the independent social media site.

  • The commentator’s ability to comment is not restricted.

  • All comments, both good and bad, can be viewed publicly.

Talk to your compliance officer for your company’s policy.

Company Approved Disclaimers

Inquire about company-approved language to be displayed prominently on your LinkedIn profiles indicating that you (and the firm) are not responsible for and do not encourage third parties to post anything on their behalf. Also ask about a company-approved disclaimer for your LinkedIn profile instructing third parties not to endorse.

This blog entry is an introduction on the topic. LinkedIn is a valuable tool for networking and news. Because you are in the finance industry does not mean you have to completely avoid LinkedIn. Talk to your compliance officer for advice specific to your situation so you get “linked in.”

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