I’M SURE I HAVE SOME COMPLIANCE GAPS, BUT DON’T KNOW WHERE TO START...

​It can be very challenging for financial firms to search, monitor, and document​ ​their ​advisor's web presence and registered websites without interrupting day-to-day business demands and operations. Yet failure to do so can leave ​exposed compliance gaps unaddressed and open your firm up to fines and disciplinary actions from regulatory agencies. Common compliance gaps often include improperly documented or improperly enforced policies and procedures, insufficient evidence of a WSP, undisclosed OBAs and social media accounts, as well as rogue advisor websites. Many firms know that they have gaps, but they don’t know where to start.

FINRA publishes a monthly disciplinary report with actions and fines against firms and individuals. One of the most common fines involves undisclosed OBAs. Currently, many firms work on the “honor system” with hopes that their employees with be completely honest and disclose everything required. Unfortunately, this honor system doesn’t always work. How are you to find out if your advisors have an undisclosed OBA? That is where Eagle Eye can help you close this gap with our deep web searching technology that quickly cut through the clutter of the web and bring to your attention relevant results when monitoring your registered reps.

Do you know if your advisors have disclosed all of their social media accounts? In a recent random sampling of 10 employees from a prospective client, our Eagle Eye solution found serious violations with three of the advisors including several OBAs and social media accounts that were never disclosed. This is a typical compliance gap for many firms. Is this one your firm is facing as well?

Are you sure that your firm is monitoring all of your advisors online advertising? Do you have a process in place that is easy to demonstrate to a regulator? Do you even know if they are producing advertising that you are unaware of? This could be another compliance gap your firm is facing.

In addition to all of the supervision regulations, you need to prove that your firm has WSPs in place to help document all of the actions your firm is taking to monitor web presence. For many firms, this turns into another compliance gap they need to address.

You have a broker-dealer responsibility to monitor every website that your advisors' utilize for business purposes. Many times, advisors want to have their own website to help them stand out among the thousands of other financial advisor websites out there. How are you monitoring these websites? Are you notified of every change automatically so that it can be approved? If not, here is another compliance gap you might be facing, there has been an increase in fines imposed by FINRA regarding website monitoring. SiteQuest Compliance's SQWatcher program is an easy to use solution that will quickly help you fill this gap at a fraction of the cost of a fine.

Then to complete all of this monitoring you need to document all of your findings in an organized manner. Many times this is the last step in the compliance process and yet it can become one of the largest compliance gaps for a firm. Our automated documentation features found as part of our programs are detailed and searchable. We provide you with all of the information you need to respond to a regulator.

SiteQuest Compliance offers programs, support, and experience to help you bridge these gaps and respond to a regulator. A firm that is able to demonstrate compliance with tangible evidence will mitigate risks, such as costly regulatory fines, and be better prepared for unannounced visits from regulatory agencies.

Contact us today and talk to us about any gaps you need help addressing.

Eagle Eye has proven to be incredibly effective at reducing risk as it continues to find websites, social media accounts and blog posts on the web that pose compliant risks to a firm, but did you know that it also saves time?
 
Yes, a lot of time.
 
One of our Eagle Eye clients recently reported that they were able to reduce their web supervision time by 80% since switching to Eagle Eye. That’s a huge number. How’s the firm utilizing their newly found time?
 
First, they are expanding their web surveillance program by increasing the depth of Eagle Eye’s search results (at no additional cost by the way). By increasing the depth by 60%, they’ll be able to uncover additional risks while demonstrating to their examiners and regulators that they are meeting their requirements for reasonable supervision outlined in NASD 3010, IM 30103, 3012, FINRA 2210 and FINRA 3270.
 
What else are they doing with their extra time?  Well of course they now have time for those extra compliance projects that have been slipping through the cracks over the past few years.
 
With Eagle Eye, not only do you reduce risk and meet your compliance and supervision responsibilities, you save lots and lots of time.
 
​ Isn’t extra time a wonderful thing?

Continually Making Sure Your Monitoring Records and Documentation are in Order
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This is not a preparedness matter to take lightly. Just last November FINRA fined a Tier One Company $2.6 million for failures in required electronic records and email retention. Read the full report.

The benefits of maintaining accurate, reliable and usable records can help to increase the efficiency and effectiveness of your business. It will ensure your firm is able to access information when required and meet all accountability and compliance requirements. Below are some suggestions that are beneficial in establishing and making sure that an effective record keeping and documentation system is in order when you are monitoring your associates' web presence.

Planning. Establish what processes are needed for monitoring records to be effectively maintained and how this will be achieved. Planning a monitoring process will help you maintain a record keeping system that works for your firm and provides clear expectations for supervisors and compliance officers.

Consistency. To make it easier for compliance staff members to do their job, have information collected and stored in a consistent way within your firm's network; all staff should follow the same policies and procedures.

Communication. Have all your staff made aware of, and ensure they understand, the FINRA general supervision requirements. Verify that all supervisors know and follow the record keeping policies and procedures established by your firm. By communicating expectations clearly, you will benefit from consistent record keeping standards.

Modify. Don’t be afraid to modify your record keeping system if you find a more efficient way to achieve results. Regular reviews of your record keeping systems will keep them up-to-date and operating in a way that is beneficial to your firm.

Responsibility. Know your responsibilities—what to record, how to maintain records and how long they should be kept. Having accurate and reliable records during an audit will allow you to easily confirm your firm’s compliance.

Review. Encourage staff to provide feedback on how the monitoring record keeping system is working and how it could be improved. In doing this, you may gain valuable suggestions that will bring continuous improvement to your administrative records, improving the efficiencies of the practice.

Embrace technology. Regularly investing in technology will help improve the efficiency of your general supervision monitoring requirements. Your staff will appreciate any efforts made to improve and automate the task of keeping records, giving them additional job satisfaction.  Additionally, removing manual steps not only makes the record keeping process more efficient, it also makes the records uniform and reduces the risk of human error.

Our clients have found that Eagle Eye’s automated reporting features saves them valuable time. With just a click, you will have everything you need including when a result was found, who reviewed it, comments that were made and time stamps on every action taken on the account. From a regulatory point of view, with Eagle Eye’s automated screenshots you will have the full story of what content looked like at the time of review, giving you everything you need to respond to a regulator.
 
Supervising the web doesn’t have to be difficult! Let us show you how Eagle Eye is a more effective solution. Contact us today for a demo. ​

The “Communications with the Public” Rule FINRA 2210 states that “an appropriately qualified registered principal of the member must pre-approve each retail communication before the earlier of its use or filing with FINRA's Advertising Regulation Department ("Department").”

“Retail Communications” include all electronic formats as well.

In addition to supervision approval:

“Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by an appropriately qualified registered principal of institutional communications used by the member and its associated persons. Such procedures must be reasonably designed to ensure that institutional communications comply with applicable standards.”

Our Eagle Eye and SQWatcher applications support your compliance program when it comes to complying with this rule.
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Our innovative Eagle Eye application will search the internet and allow supervisors to identify and discover your registered advisors’ online presence. Our multi-query processes and dynamically designed algorithms provide more accurate search results for supervisors to quickly review.

With our automated documentation and reporting features, you will have everything you need including when a result was found, who reviewed it, comments that were made and timestamps on every action taken during the online supervision of your registered advisors.

SQWatcher will supervise and archive all websites, even those not hosted with your approved providers. It will organize web-page changes into a manageable, easy to use workflow. Automatic triggers based upon your requirements will notify you of pending reviews.

These products were developed for the compliance supervisors who are looking for automated solutions to replace manual processes that prove to be ineffective and tedious.
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Note: NASD Rule 2210 has been superseded by FINRA Rule 2210.
 
Source: https://www.finra.org/rules-guidance/rulebooks/finra-rules/2210

What controls does your firm have in place to aid you in discovering DBAs if your advisors are not disclosing them?​

“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 recently sent out Regulatory Notice 20-30 regarding an increase in imposter advisor websites being created with malicious intent. These fraudsters are also calling and directing potential customers to use these imposter websites. Additionally these imposters may be using these sites to collect personal information from potential customers with the likely end goal of committing financial fraud.

According to FINRA, some common features of these websites include:
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• Using the registered representative’s name as the domain name for the website (e.g., firstnamemiddlenamelastname.com).
• Including a picture purporting to be the registered representative.
• Providing information about the registered representative’s employment history, including prior employers’ CRD numbers and examination history.
• Asking individuals to fill out a contact form with the individuals’ names, email addresses, phone numbers, the subject of the inquiry and space for a message.
• Many of these sites contain poor grammar, misspellings, odd or awkward phrasings, or misuse of financial services terminology.

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The potential damage of an Imposter Website could be irreversible. What can you do?

Eagle Eye by SiteQuest Compliance has everything you need to monitor the internet and discover imposter sites and other compliance threats to your firm. Our multi-query processes, lexicon searches and dynamically designed algorithms provides more accurate search results saving you time and automatically alerting you to new search results concerning your registered representatives’ identity.  

Additionally, our system considers the domain name as it searches for results and scores them for potential reviews.

Our easy-to-use workflows allow you to quickly review dozens to hundreds of search results in minutes. Many of our clients have found that with Eagle Eye they cut their workload by 80%.

If you do discover an imposter website contact FINRA and the FBI immediately.

See for yourself how Eagle Eye will support your compliance and supervision programs to monitor the web and discover these types of issues and more. Contact us today for your personalized demo.

Eagle Eye also supports your firm’s adherence to regulatory requirements like FINRA Rules 2210, 3110, 3120, and 3270 by providing supervision of the internet.
 
Read the Entire Regulatory Notice 20-30

Let’s face it, the coronavirus pandemic has fundamentally changed the way we do business. Most of our industry is working from home, learning to balance conference calls and kids with questions that just can’t wait or dogs that must bark while on a Zoom meeting.  We’ve all been there and have our moments. 
 
Other things have changed as well, especially when it comes to marketing and advertising.  This is especially true for financial advisors who have lost the ability to connect with clients at events, lunches, in office or at home meetings or simple introductions that come from face-to-face interactions. or years, many advisor’s businesses have primarily depended on these methods to connect with current clients and meet new prospects. Social distancing and stay at home orders have eliminated these options for many advisors who are now exploring new options to prospect and connect with people. 
 
So where are they turning? Like everyone else, advisors are turning to technology to increase their online presence with updated profiles while sharing fresh and timely content.
 
I recently spoke to some of our clients about trends they were seeing regarding their advisor’s marketing and advertising behaviors since social distancing and stay home orders began. One compliance manager told me his firm has seen a 30% increase in advertising submissions as well as a significant increase in the use of approved social media sites like Facebook, LinkedIn and Twitter. 
 
Another client told me, “Advisors have ‘downtime’ and are now thinking a lot about marketing.”  I followed up on how things have changed for our client as a result. “Don’t get me started on how much social media usage has jumped since this all began!” They have seen an increase of 25% to 30% in usage and a surge in new accounts being created by their advisors.
 
Social Media usage is certainly on the rise.  A recent survey showed that 32% of Americans said they have increased the amount of time they are using social media sites like Facebook and Twitter. 
 
Another firm told me that advisors who have typically shied away from social media, online profiles, websites, and other marketing technologies are now diving in for the first time. I was told, “Their (advisors) traditional lead generation tools aren’t available anymore. They now have time and are focusing on new ways to build their business.” 
 
Additionally, our clients are seeing a big increase in advertising submissions for recordings from Zoom/online meetings. Advisors are continually seeking guidance on additional options for communicating and marketing to the public.
 
This all presents an increasing challenge in supervision and compliance, especially when there are growing limitations on human resources.
 
That’s where our Eagle Eye technology comes in. Eagle Eye helps our clients uncover their advisors’ web presence, locating social media accounts, websites, articles, profiles, videos, OBA’s and more.  Eagle Eye creates automated documentation of what has been reviewed, who did the review, and what the website looked like at the time of review, giving our clients and regulators a complete picture of the process.  They use our system to discover and “clean up” situations where the use of these sites was done without approvals or monitoring in place.
 
Another one of our clients shared with us that, “Thanks to Eagle Eye, it is helping me identify and address issues before they are brought to my attention by a regulator.”
 
With our industry evolving, SiteQuest Compliance is a preferred partner when it comes to internet supervision and website management.
 
Contact us today for your personalized demo where we can discuss your supervision concerns and see for yourself how Eagle Eye can support your internet supervision requirements.