Bowing to the increase in the number of investors using social media and the Internet to research financial advisors, the Securities and Exchange Commission Division of Investment Management opened the door Monday for investment advisors and investment advisor representatives to place commentary from social media and Web sites on their own sites.

Under the new guidance, advisors are allowed to include all of the commentary from a particular independent social media source or Web site on their own as long as the advisor includes all of the mentions and doesn’t delete the unfavorable commentary.

Advisors and IARs are now permitted to advertise on independent sites as long as the site's advertising doesn’t influence its content and the public is aware of that.

They are also allowed to make references to stand-alone sites and include their logos on their own Web offerings.

“For example, an IAR could state in its newspaper ad “see us on [independent social media site],” to signal to clients and prospective clients that they can research public commentary about the investment advisor or IAR on an independent social media site,” the SEC said.

The SEC said it won’t consider a list of contacts on a social media site (such as friends on Facebook) as an advertisement as long as the people are not identified as current or past clients.

Also the guidance bars advisors from placing public commentary about a client’s experience with him or her on the professional’s own Web site, blog or social media site.

In a change from the past, the SEC is allowing independent advisory representatives to mention non-investment related commentary in their ads.

For the full, 10-page report, click here.