The Top 10 Best Practices for Using Social Media as an Investing Too

More and more investors are using social media as a tool for their investing needs. As a result of the inherent risks associated with social media, the SEC has issued an Investor Bulletin to highlight best practices for those clients.

Ed note: This post originally appeared on Securities Compliance Sentinel.

More and more investors are using social media as a tool for their investing needs. As a result of the inherent risks associated with social media, the SEC has issued an Investor Bulletin to highlight best practices for those clients.

It makes sense for firms to review this Bulletin so that you are in the best position to advise your clients accordingly about their use of social media as an investing tool. The SEC’s tips included the following:

1. Check the security default settings and modify them before posting any information on social media.
2. Consider customizing the privacy settings to minimize the amount of available biographical information.
3. Never communicate account information through social media; a financial advisor’s social media site may not be firm-sponsored and subject to firm-specific security settings.fraud.jpg
4. Think long and hard before accepting “friend” requests from a financial services provider, particularly when considering the purpose of the social media site.
5. Investors should understand the functionality of the site before broadcasting any financial information because certain information may be widely seen.
6. Investors should always have a strong password, at least eight characters and with a mix of letters, numbers and symbols.
7. Use separate and unique passwords for each social media site.
8. Investors should avoid accessing their social media accounts through public or shared computers.
9. Be very careful before clicking on a link, even if it appears to be one from a “friend”.
10. Secure your mobile devices with a unique password, especially if the mobile device is linked to any of the investors’ social media accounts.

These are only a handful of suggestions from the SEC. If you have clients using social media for investing tools, you would be well-served to give them this guidance, or else they too may be the victim of internet crime.*


Securities Compliance Sentinel is part of the LexBlog Network (LXBN). LXBN is the world’s largest network of professional blogs. With more than 8,000 authors, LXBN is the only media source featuring the latest lawyer-generated commentary on news and issues from around the globe.”

Sponsored

CRM Banner