The SEC Gives Financial Advisors A Pass

The Securities and Exchange Commission (SEC) regulates financial advisors

The Securities and Exchange Commission (SEC) regulates financial

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advisors via The Investment Advisers Act of 1940. They have now opened the way for financial advisors and money managers to start promoting investor reviews that are present on social networks. Prior to the SEC opening the door for these professionals, social media was already there – Twitter, Linkedin and Yelp. I suppose the SEC did not notice the presence of those vehicles before. Long before the SEC made its ruling, investors had the ability to post and review comments from advisors on websites that had been around for a very long time.

As long as the posting was put up by the investor and not coerced by the Advisor, then there was no problem with the SEC. The SEC gave the green light for advisors to integrate positive posts and testimonials into their marketing strategies. There is one little catch, the advisors and money managers cannot edit out the negative comments. More and more people are beginning to use the internet to search for all of their needs.

A recent Corporate Insight survey revealed that 67 percent of millenniums would use online search engines to learn more about the financial advisors they select. Only 28 percent of baby boomers would be inclined to use online tools. Investors and individuals looking to financial advisors and money managers to help with their financial challenges need to have as much access to information about these professionals as possible. When individuals have adequate and relevant information, they can then make an informed decision. Transparency is best for all concerned.