The Do’s and Don’ts of Compliance for Financial Advisors

The Do’s and Don’ts of Compliance for Financial Advisors

If you’re feeling overwhelmed by the rules of compliance for financial advisors, you’re not alone. The good news? With a little careful navigating, you can stay in line with industry regulations and market your services in a way that gets more business in your doors.

Thanks, Great Depression

When the financial industry initially was blamed for the 1929 stock market crash and ensuing depression, the federal government responded by crafting the nation’s first set of compliance laws. Historians later concluded Wall Street wasn’t solely at fault, but compliance was here to stay.

Today, with decades of regulations and case law caked on, compliance rules can seem daunting. Still, it’s more critical than ever for advisors to stay in touch with their networks of clients, prospects and referral partners. Advisors need to create and distribute great content to survive.

So how can a financial advisor use content marketing without fear of compliance misery?

Here are three do’s and three don’ts to help navigate the compliance maze. We’ll concentrate on compliance as it pertains to the content advisors create for general communications such as email newsletters and social media.

Let’s get the don’ts out of the way first.

1) Don’t Advise

Sounds funny for an advisor, doesn’t it? But here’s why: core to compliance is the notion that appropriateness of any advice depends on the individual receiving it — their stage of life, risk tolerance and more. Advice should only be dispensed one-to-one to clients, based on their specific situations.

Let’s use a fictional example: a publicly traded stock named Acme, Inc. Investing in Acme may be a great plan for a millennial with aggressive growth goals, but a bad move for a fixed-income retiree. Promoting the purchase of any specific security in a general communication is a major compliance don’t.

2) Don’t Adopt

Leave it to regulators to taint a warm and loving term like adoption, but we’re not talking about giving a better life to a child or furry friend. In the world of compliance, adopting is endorsing the point of view expressed in an article. Adoption comes into play most often when an advisor comments and provides a link to an article in a newsletter or social post. A regulator asks this: would a reasonable person assume that the advisor is ‘adopting’ the opinions in the article by linking to it? Returning to our Acme example, an advisor should avoid linking to an article touting Acme stock as a good buy, especially if the text of the newsletter or social post implies that the advisor endorses that point of view.

3) Don’t Solicit

Regulators presume that advisors know so much about financial topics that their clients are fundamentally disadvantaged in the advisor-advisee relationship. Compliance regulations compensate for that by not allowing advisors to ‘ask for the order’ in any mass communications: newsletters, social media posts or advertising. So what a marketing person would term a call-to-action (CTA) such as ‘sign up now’ or ‘call to learn more’ is forbidden. Instead, regulators prefer that consumers make their own determinations about whether they want to seek out the advisor for further information. In our Acme Inc. example, while it might be reasonable for an article to include Acme on a list of objectively high-performing stocks, an advisor couldn’t also write something like “call me to discuss if Acme or any of these stocks would be a good addition to your portfolio”. That’s soliciting, and it’s not allowed.

Now onto things you can and should do.

1) Do Keep Complete Records

It’s a marvel that more hoarders aren’t financial advisors because the rules basically require advisors to hold on to everything. All client communication including newsletters and social posts must be kept for five years. Up to six, really, since the rule is five years from the last day of the fiscal year when it’s published. They couldn’t just say six and keep it simple, right? Also, a proper archive must be organized so that it’s easy to find any document of interest without having to rifle through a shoebox — digital or otherwise.

2) Do Question (mark) Everything

Posing questions instead of making statements is one of the surest ways to avoid the adoption don’t — especially when posting on social media. Using our Acme example, an advisor might link to an article profiling Acme and forecasting its future stock price, adding a comment in the form of a question: “Here’s a fresh perspective recommending Acme Inc. as an up-and-comer. Do you agree?”

3) Do Choose Process Over Prescription

It’s perfectly acceptable for newsletter content to outline a process that leads an investor to determine whether a particular strategy is a good fit for her, so long as it doesn’t prescribe how to act on it. For example, a compliant article might list the factors that could lead an investor to determine if stocks like Acme are appropriate for a given investor. While giving an answer is not allowed, providing a path for a reader to follow to seek his own answer is just fine.


The reality is that it’s relatively easy for financial advisors to create compliant newsletters and social media content as part of a marketing plan to grow their book of business. But advisors don’t need to go it alone. The firm’s compliance officer can provide guidance. Some firms use outsourced providers to review content before it’s published. Here at OutboundEngine, we create and deliver email newsletters and social media posts for financial advisors, thereby taking the content marketing worry off the advisor’s plate entirely.

No matter the method of creating content, this is no time for a financial advisor’s voice to be muted. A personal touch that reaffirms your expertise in between visits, is a critical differentiator between successful advisors and their growing list of competitors — including popular robo-advisors like Wealthfront and Betterment.

The bottom line: produce great content to win as a financial advisor. We’d write more about it, but we just got a great stock tip and need to hurry and buy it. Have you heard about Acme, Inc.?


Almost There!
Get the latest Email Marketing Roadmap now.