After an exhaustive study, the Massachusetts Securities Division has concluded that state-regulated advisors can use social media as long as they treat the communications as advertising -- and are mindful of the interactive nature of the format.
But given its rich technological base, Massachusetts drills down deeper into areas of potential endorsement and selective editing.
Their regulators agree with the SEC that if a client "likes" an advisor's page or post, it could be a testimonial. But they spell out that a "like" in itself does not constitute a compliance problem:
"The purpose of the testimonial prohibition is to avoid the mistaken impression of a reader that the experience of one client is likely to be achieved in the reader’s particular circumstances. Facebook 'likes' by themselves are not likely to give rise to such a mistaken impression."
Still, the state recommends that advisors warn clients not to post positive reviews. And disclosure should include language about how "likes" do not reflect any kind of endorsement.
The state also formally extended its guidance on when advisors "adopt" third-party content or are "entangled" in its creation to social media. In brief, if you edit or promote it, you're responsible.
Massachusetts suggests advisors review their site once a day to avoid problems.