We’re going to wander off the AdvisorTweets reservation this morning to make sure that you’re aware of a few FINRA-related updates that could impact financial advisors’ use of social networks, including Facebook, LinkedIn and–we are inferring here–Twitter.

FINRA’s  Rick Ketchum, Chairman and CEO of the Financial Industry Regulatory Authority, yesterday devoted part of his speech to the Securities Industry and Financial Markets Association Annual Meeting (SIFMA) to the subject of social networking. Here’s the excerpt:

“… how can firms evolve the way they communicate with customers while still meeting regulatory requirements and without sacrificing the protection of the very audience they are trying to reach? We continue to witness the advent of technologies that will challenge your ability to ensure compliance with regulatory requirements. The social networking phenomenon is one such innovation. Social networking sites such as Facebook or LinkedIn provide new ways to connect, inform and interact with customers. They also raise new regulatory challenges. For example, as currently designed they may not allow you to archive and maintain the communications on your own books and records.

Many registered representatives, particularly younger ones, want to use social networking sites to communicate with friends and potential customers. As currently constructed, these sites would not permit you to easily supervise these communications. For that reason, most firms prohibit their employees from using these sites for their business. Nevertheless, interest in these sites will not go unabated. Overcoming many of these challenges will require technology solutions. In fact, we are aware of new technologies that may soon enable firms to archive employee communications in order to comply with supervision and recordkeeping requirements.

FINRA is trying to do its part. We have formed a Social Networking Task Force comprised of industry participants to explore how regulation can embrace technological advancements in ways that improve the flow of information between firms and their customers—without compromising investor protection.”

You’ll find the full text of the speech here.

Here’s Reuters’ coverage of the speech and the IR Web Report had its own take.

We’d add only two thoughts. One is regarding the line about particularly younger registered representatives wanting to use social networking sites. Ahem, have you taken a look at the photos streaming on AdvisorTweets? As the FINRA task force will no doubt discover, it’s not just the younger financial  advisors whose curiosity is piqued by social networking. We’d worry about that characterization because younger advisors who tend to have smaller books unfortunately tend to have less influence in effecting change.

Second, while we don’t know if the solutions used by smaller offices can be scaled by the larger brokerages, we do know that the independent advisors who today are using Twitter are archiving and maintaining their records. See the FP Pad June post for more on this.

Finally, FINRA has scheduled a Compliance Considerations for Social Networking Sites Webinar on Dec. 16. Update: On Nov. 23, this Webinar was rescheduled to March 17, 2010. This event holds great interest for those wondering if we’re going to see FINRA-regulated financial advisors tweeting in the near future.