April Fool's Day isn't the only day advisors might be foolish. If you don't have a social media policy in place, you are putting your firm at risk.

Think about the history of e-mail and its evolution. When that technology was rolled out, policies were put in place because hundreds or even thousands of people could be contacted in seconds with one e-mail. Social media, with its opportunity for communications to go viral, can go to millions in no time at all.

Take a test to see if you are a fool:
    Do you have a social media policy?
    Do you train on the policy?
    Do you go back and review that your employees are in compliance with your policy?

If you answered "no" to any of these questions, you are a social media fool. (No offense, as most advisors still fit in this category.)

Don't Make A Wiener Mistake
We all know about the ex-Congressman, Anthony Weiner, and his explicit photos on his Twitter account. Weiner-Gate was a late-night talk show dream come true and it cost the representative from New York his job and likely his career.

Your firm might not be making that kind of mistake, but it is at risk of having employees do stupid things online. If you never told them that the company restricts that kind of activity, your company might not be able to take the appropriate actions needed to avert a reputation disaster, discipline the associate and make things right.

Compliance Requirements
Although there's too much on compliance policies to cover in one article, know that you should have a policy, employees should be trained on the policy, and the firm should check that it and the employees are in compliance.

SEC Spokesman, John Nester was not as blunt around the needs for content policies and training around social media, when he stated, "It's something [advisors] need to consider. Firms may also want to consider implementing training to promote compliance and prevent potential securities laws violations."

Even the SEC's January 2012 Risk Alert has wording that is soft. For example, it states, "A firm may consider" instead of "A firm should have content standards." Another example is seen in, "A firm may consider implementing training related to social media" instead of saying firms should have training.

Joe Price, Finra senior vice president, was a little more direct, when he said, "Broker-dealers' employees are using social media to engage in personal communications with their friends and family. If those communications cross over to discussions of the firm's business, Finra rules and the rules under the federal securities laws are implicated. Firms must train their employees so that they can recognize and distinguish business communications from non-business communications."

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