Social Media & Electronic Communications
Business messages on any channel are communications that must be supervised and kept.
What is Social Media & Electronic Communications?
Posts, websites, emails, and text messages used for business are advertising or correspondence subject to content rules and recordkeeping. Firms must capture and retain them, so business conducted on unapproved channels - personal texting apps, for example - is a violation. Endorsing or editing third-party content about the firm can make the firm responsible for it.
Social Media & Electronic Communications: a worked example
An IAR who texts clients from a personal phone the firm cannot archive is creating a books-and-records violation.
More terms in Ethics & Fiduciary Obligations
Form ADV Part 2 Brochure Delivery
Deliver 48 hours before the contract, or at signing with a 5-business-day exit.
Advisory Contract Requirements
Written, specific about fees, no assignment without consent, no waiver of rights.
Assignment of an Advisory Contract
Transferring a client contract requires the client's consent - including by change of control.
Performance-Based Fees & Qualified Clients
Allowed only for qualified clients: $1.4M with the adviser or $2.7M net worth (from June 29, 2026).
Prepaid Fees & Financial Requirements
Prepayment over $500, six months ahead, triggers net worth and balance sheet rules.
Custody
Holding, or having authority to obtain, client funds or securities.
Discretionary Authority
Deciding the asset, the amount, or buy versus sell - without asking first.
Third-Party Trading Authorization
Anyone other than the owner needs written authority to trade the account.