What controls does your firm have in place to aid you in discovering DBAs if your advisors are not disclosing them? “FINRA’s examination, surveillance and risk monitoring programs play a central role in supporting FINRA’s mission of investor protection and market integrity.” “DBAs and Communications With the Public” were one of the findings highlighted. FINRA continues to find that many registered representatives are not compliant with FINRA Rule 3270 in trying to conceal their outside business activities. “FINRA observed that certain firms did not maintain sufficient WSPs and controls, or provide adequate disclosures regarding the use of DBA names.” What controls does your firm have in place to aid you in discovering these DBAs if your advisors are not disclosing them? How do you know what your advisors are putting online using their “DBA” name? That is where our Eagle Eye application steps in. Our multi-query processes and dynamically designed algorithms provide more accurate online search results for you to quickly review. Our new “Risk-Based Review Process” provides added system intelligence, enhanced lexicon capabilities, system learning, and detailed evaluation of your search results. Eagle Eye automatically discovers your riskiest advisors and focuses your attention to where it’s needed. FINRA’s exam report also focused on registered representatives’ use of DBA names on their websites, social media accounts, seminars, and more that failed disclose they were working on behalf of a firm. FINRA also found many instances where there was no hyperlink to FINRA’s BrokerCheck. “Some registered representatives’ websites did not contain a “readily apparent reference” and hyperlink to FINRA’s BrokerCheck on the web pages that included the representatives’ professional profiles, as FINRA Rule 2210(d)(8)(A) (Communications with the Public) requires.” With precision our Eagle Eye application can find undisclosed websites, and social media accounts using the DBA names owned by your registered advisors. Enabling you to supervise and make sure that your advisors are following FINRA requirements. Then, our SQWatcher application can help you monitor, review, approve, and document changes made to your registered representatives’ websites. (Learn more about this application) These two applications become force-multipliers in your supervision program.
The annual FINRA Exam Findings Report is helpful for firms in bringing non-compliance issues to the forefront. It is a good time to reflect and examine on your own WSPs and supervisions procedures. With over 15 years of working in the financial industry, SiteQuest Technologies is an industry leader in providing innovative compliance and supervision software applications and website solutions for the financial industry. Contact us today with your DBA supervision concerns. Read the entire FINRA Exam Findings: http://www.finra.org/sites/default/files/2018_exam_findings.pdf Related Article: Are You Finding Everything You Need to Monitor? One of our clients has been using the application for almost a year and described Eagle Eye as a “godsend.”
Why? Since switching to Eagle Eye, this firm has:
With Eagle Eye’s automated searches, easy-to-use workflow and blacklisting technology, this client was able to do their reviews in a fraction of the time it took when doing it by hand. Not only has this time savings come in handy when it came to other projects, but they were also able to expand their supervision levels and are now looking deeper into the web through our application. It’s certainly turned into a “Win-Win-Win” situation that only required a small investment in a tool that now automates a process that used to be completely manual. Contact us today for a quick demo to see how Eagle Eye can not only save you time but also reduce your compliance risks. It has been over 40 years since significant changes to "The Investment Advisers Act" were adopted. To say that advisors are excited about this recent update is definitely an understatement. With all of the different communication and social media platforms available to advisors, they are eagerly looking forward to sharing testimonials with potential clients hoping to open new doors of opportunities.
Firms and their compliance departments need to take a proactive approach when it comes to addressing these new marketing updates. Testimonials and endorsements still need to be monitored and approved to ensure they are not misleading investors. Firms need to decide what types of statements they are going to approve, what platforms will be utilized, and how registered advisors are going to notify them and gain approval before any endorsement is published. Initially advisors will want to add these testimonials and endorsements to their websites and other online destinations that may or may not be monitored by compliance. Demands on compliance’s time for monitoring and approvals will certainly increase. Additionally, firms need to reevaluate their disclosure policies to ensure that advisors provide notification and documentation of what and where they wish to publish testimonials and endorsements online. Compliance departments should expect to see a large increase in their workload related to internet monitoring and approvals that need to occur. What will compliance do to monitor endorsement and testimonial platforms such as Yelp, Google Reviews, or social media platforms like Linkedin, Facebook, and Twitter? Advertisements that include third-party ratings will be required to include specific disclosures to prevent them from being misleading. Is compliance waiting for advisors to disclose everything? Are policies based entirely on the honor system? How do you discover your advisor’s online presence, including these new testimonials and endorsements if they are not disclosing them to compliance? While you are forming your compliance strategy and updating policies, procedures and workflows it is important to consider how and what technologies can assist compliance with this increased workload. As the SEC and FINRA are adapting to new technology, compliance departments need to evolve and rely on innovative technology as well to support their job requirements. For over a decade, SiteQuest Compliance has continued to be a trusted partner, supporting compliance and supervision departments with tools that can help meet these increasing demands with regards to compliance and supervision. Our Eagle Eye solution uncovers and supervises your advisors’ online footprint. It discovers social media accounts, websites, blogs, yelp pages, OBAs, DBAs, and online profiles, allowing you to address issues prior to regulatory discovery or examination. Our SQWatcher platform monitors and archives advisor websites including those that may be hosted by non-approved website providers. It creates historical records of these sites, creates workflow events of specific types of changes like new pages, changes to readable text, images, and more with customizable rules to meet your needs. This update to the Investment Advisers Act will require your firm to revise its policies. Our newly launched Policies solution is a powerful tool used to organize, version control, and distribute your firm’s policies and Written Supervisory Procedures (WSPs) to your employees and advisors. Ensuring that your advisors always have access to your most current policies with easy to search features. As your advisors are “Modernizing their Marketing Practices” contact us today to discuss your specific needs and concerns. Let us show you how we can help streamline your workflows to maximize your time, while helping to ensure you don’t miss anything with regards to internet and website supervision and content approval. Sources: https://www.sec.gov/news/press-release/2020-334 | https://www.sec.gov/rules/final/2020/ia-5653.pdf A securities corporation in California was recently censured and fined for a variety of violations related to their WSPs. /
“Representatives were able to maintain business-related pages on a social media site that had not been preapproved by a qualified registered principal. As a result of the firm not reasonably monitoring for usage of undisclosed websites, it failed to preapprove websites operated by representatives as required by its WSPs.”
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The Securities Corporation’s WSPs required that the firm conduct a weekly review of registered representatives' social media sites that had been disclosed to the firm. Notwithstanding the firm's WSPs, this firm failed to conduct such a review 22 times out of a sample of 26 weeks reviewed by FINRA.
Additionally, during this audit period, the firm's WSPs required that a registered representative receive preapproval for a webpage on a business-related social media site. Because the firm did not have a reasonable system to monitor for compliance with its social media policies. 38 registered representatives were able to maintain business-related webpages on a social media site that had not been preapproved by a qualified registered principal. Additionally, because the firm did not reasonably monitor for usage of undisclosed websites, the firm failed to preapprove four websites operated by registered representatives as required by the firm's WSPs. It can become very time consuming for a CCO to manually perform weekly reviews on advisors' websites and online presence. Automation is the key to any compliance program and that is where SiteQuest Compliance is able to assist you on a variety of fronts. We often hear from CCOs Eagle Eye uncovers undisclosed social media accounts. How are you to supervise these accounts when you don’t even know about them in the first place? That is where our Eagle Eye application comes in to support your internet supervision methods. With “Eagle Eyes”, our application will help you search, discover, and document your advisors’ online presence. This includes undisclosed social media accounts, websites, blogs, and more. With customizable workflows this application will help you approve, or flag for further review each discovery. This firm was also cited and fined for failing to monitor websites, and for not pre-approving websites operated by their representatives. SiteQuest Compliance brings you years of experience when it comes to web crawling, monitoring, archiving, and website analysis with our SQWatcher application. SQWatcher can monitor websites hosted on your network, or an outside hosting systems. We would love to personally demonstrate how our applications will support and enhance your supervision processes. Let us show you how it is done. Schedule your personalized demo today. Source: (FINRA Case #2015047824201) Whether they wanted to innovate, or a pandemic forced their hand, advisors embraced more digital marketing resources during 2020.
According to InvestmentNews Research, 42% of advisers have used a new digital marketing or technology tool for the first time during 2020, while 88% have expanded the use of at least one tool. The driving force, not surprisingly, was the pandemic, and a stay-at-home environment that forced advisors to find new ways to connect with their customers. As our world has changed over the past year it begs questions like:
Surges in online marketing and communications are not going to level out anytime soon. 80% of surveyed advisers said they would be placing more importance on their digital marketing in the coming year. For nearly a decade, Eagle Eye has provided a platform compliance can rely on when it comes to monitoring the internet activity of their advisors. Eagle Eye discovers social media accounts, websites, blogs, OBAs, DBAs, online profiles, and events that belong to or are about your advisors, allowing you to address issues prior to regulatory discovery or examination. Eagle Eye monitors 50,000+ advisors across our customer base and has automatically alerted compliance supervisors on over 1.2M discoveries that warranted reviews broken down by
Contact us to schedule a time to discuss your internet supervision compliance needs and concerns this New Year. We will show you the solutions that Eagle Eye provides to companies when it comes to internet supervision. Kindly, James Cella, President and CEO james@sqcompliance.com Source: https://www.investmentnews.com/adapt-and-survive-2020-forces-adviser-embrace-of-digital-tools-199923 WHERE DID THE IDEA OF EAGLE EYE COME FROM?
We get asked this question all the time and honestly, we are proud to say that its genesis came from compliance and supervision professionals like you. In fact, many of the features and processes come directly from our clients and those who are using the application in short-term pilots. Learn More. We would like to share with you some of the trends we are finding while assisting our clients with their requirements to supervise their representatives’ web presence:
The growth of the internet has been exponential over the last decade with no signs of slowing down. Hundreds of thousands of websites have emerged on every subject imaginable, with literally billions of web pages online. As of April, 2019, the Indexed Web is estimated to contain at least 5.6 billion pages, according to WorldWideWebSize.com. It is difficult to fully comprehend exactly how many websites and web pages there are out there in the vast internet universe. As a supervisor for a financial firm, you personally might have a better idea of how big it is when you are trying to supervise your representatives’ web presence. When performing a basic web search, you get hundreds, if not thousands of irrelevant results. It then becomes your job, as a supervisor to try and sift through all that web clutter to document and report on anything pertinent that you might find. It can end up taking most your day just trying to find results relevant to your intended search. Your time is valuable. Any search engine can produce an endless amount of meaningless results that need to be reviewed. Our Eagle Eye application is designed with built-in intelligence that sifts through the web’s clutter and brings only the most relevant results to your attention. Our multi-query processes and dynamically designed algorithms provide more accurate results for a quick review process. In addition to our search results our automated screenshots feature helps you document, report and escalate any issue that is brought to light. One of our clients said "The Eagle Eye Surveillance system has been a force multiplier in my firm’s supervisory scheme. This simple tool has transformed my internet surveillance sweep process from a time-consuming, multi-day enterprise where I view the same search results over and over to a simple process that can be completed in a couple of hours." Another one of our clients said: “As soon as we implemented Eagle Eye, the system found searches that were previously missed with the manual process and as a result, we updated our policy and procedures to minimize compliance risk. Also, one of our previous hurdles was demonstrating to our regulators with documentation that we were conducting the appropriate monitoring but with the audits reports, that are available directly from the system, we are able to document and show individual findings in an organized manner." Outside OBAs and unauthorized content from your representatives or advisors are a growing concern that will always be present. Minimize your risk by utilizing Eagle Eye. See for yourself how Eagle Eye will meticulously search the web for you and your firm.
Contact us today for a demo. Source: http://www.worldwidewebsize.com/ Are Yours? Do You Even Know It is Happening?
One website that is growing in popularity for advisors is Yelp.com. The ability to list your business and have people leave reviews is very tempting for advisors to use in hopes of gaining new clients. Unfortunately the use of Yelp is in direct violation of the SEC’s “Testimonial Rule” under the Investment Advisers Act of 1940. Recently, the Securities and Exchange Commission charged three advisers and a marketing firm for violating the testimonial rule by promoting their business on Yelp. These three advisors worked with a marketing company to solicit testimonials from clients asking them to post their reviews on the investment adviser's behalf to Yelp and other social media websites. Each of these advisors were fined $10,000. The marketing firm received cease-and-desist orders and were required to pay civil penalties of $35,000. YouTube is another platform that is rising in usage by advisors resulting in violations and fines. An Illinois-based RIA, was fined $15,000 for creating a 31-minute-long YouTube video that featured testimonials from multiple clients. The video was published on their public website and YouTube.com, and was shown to guests at a party celebrating the firm's 50th anniversary. This YouTube video was also in direct violation with the SEC’s “Testimonial Rule”. Are you actively monitoring Yelp and YouTube for these type of SEC infractions from your registered advisors? It can be difficult even knowing where to start. Over 4.6 million businesses are using Yelp. With an ever increasing 163 million Yelp reviews how are you to know if your advisors are actively soliciting testimonials from their clients? Adding to your monitoring struggle is YouTube. It is estimated that over 300 hours of video are uploaded to YouTube every minute! With over 1 billion daily users how are you to find videos uploaded to YouTube by your registered advisors if they don’t send you the direct links? Eagle Eye is a solution. With Eagle Eye precision our application will help you quickly identify any social media accounts including Yelp and YouTube that your registered advisors own. Allowing your firm to take action and comply with the SEC’s requirements. Eagle Eye’s automated documentation and screenshots of your findings will help you respond to a regulator. We’d love to show you more. Contact SiteQuest Compliance today to see how our application can aid in your supervision responsibilities, saving you time and lowering your risk. Related Article: Trends when it comes to supervising the web. Related Article: Known Compliance Gaps Sources: SEC.gov | Investment News 10/27/2020
Prioritizing Innovation TodayA recent McKinsey survey of more than 200 organizations across various industries found that three-fourths believed that the fallout from the pandemic crisis will create significant new opportunities for growth in their industry, and the report shows that historically “companies that invest in innovation through a crisis outperform peers during the recovery.” Most agree that technology and innovation are the keys to “unlocking post-crisis growth”, yet few feel equipped to pursue these new growth opportunities. Of course, seeing the opportunities emerging from this crisis is not the same as being able to seize them. Fewer than 30 percent feel confident that they are prepared to address the changes they see coming. Today’s regulatory environment is one that supports innovation within the financial industry. Regulators encourage financial organizations to rely on technology to effectively and efficiently execute a compliance program. FINRA’s newly formed Office of Financial Innovation is an example of this. As a result, many organizations are taking this as an opportunity to implement new technologies to help streamline their compliance process. Technology is going to help these financial firms navigate and optimize their compliance programs moving forward... BUT many firms do not know where to turn. Our comprehensive understanding of the challenges compliance and supervision department’s face, as well as our proven ability to help firms meet their regulatory obligations is why SiteQuest Compliance has become a trusted partner and solution provider. One of our customers stated that: /
"We needed to come up with a better way to review our advisors' activity on the web because we weren't confident our manual internet searches were identifying everything we needed to supervise. After looking at other solutions, we selected SiteQuest Compliance and their Eagle Eye product. Sitequest Compliance was very accommodating, working closely with us to meet our company's specific needs. We have found our searches to be much more robust now. SiteQuest Compliance continues to be a great partner and is very customer focused!"
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Let us show you how our compliance applications will help support and automate much of your supervision and policy requirements. See first-hand our applications at work. Contact us today for your personalized demo. The subtitle of the referenced McKinsey report says it all: “Prioritizing innovation today is the key to unlocking post-crisis growth.” Progressive compliance leaders who are turning to innovative technology and automation to manage their ever increasing regulatory demands while protecting their organizations and their customers from risk will have a competitive advantage after the crisis. Implementing the inventive applications from SiteQuest Compliance while automating much of your supervision requirements will help ensure a stronger and more trusted firm today, and for years to come. Source: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/innovation-in-a-crisis-why-it-is-more-critical-than-ever Related Articles: 10/1/2020
What is SQWatcherWHAT IS SQWATCHER?
SQWatcher monitors and archives advisor websites that may be hosted by non-approved website providers. It creates historical records of these sites, creates workflow events of specific types of changes like new pages, changes to readable text, images, and more with customizable rules to meet your needs. WHY DO YOU NEED IT? SQWatcher supports your firm’s adherence to regulatory requirements like FINRA Rules 2210, 3110, 3120, 4511 and 4550 by actively supervising these websites for unapproved changes and providing historical archives of the site. YOUR RETURN ON INVESTMENT SQWatcher’s powerful workflow review processes along with dynamic crawler technology allows your firm to monitor and document dozens to hundreds of websites with relatively few employee hours involved. It reduces compliance and “failure to supervise” risks while demonstrating to regulators, your firm is actively supervising these unique websites in compliance with FINRA and SEC rules. Schedule your personalized demo today! |
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