To make matters worse, some law firms advise their clients that use of programs like Snapchat may cause courts or investigators (like FINRA) to presume the worst: “Moreover… the use of auto‐ deletion apps by key witnesses could be portrayed as suspicious (at best) and deliberately intended to destroy damaging evidence (at worst).
When it comes to recordkeeping requirements, there’s no shortage of rules. Both the SEC and FINRA have their own requirements. And while you may wish that those rules would go up in a puff of smoke, you definitely don’t want the communications to disappear in 24 hours. That means when it comes to ephemeral communications you need to be on your toes.
As more marketers suggest that businesses bring their marketing into the social media realm, and as some investment companies are growing their marketing there, it may be tempting to want to try out new forms of communication. The stats are impressive in that 41% of 18 to 34 year olds use Snapchat every day, and 76% of those using Snapchat make a purchase each month.
Banks have been trying to up their cool quotient by using Snapchat. “To woo young talent, JPMorgan Chase has advertised on the app. Citigroup is using the company's trendy sunglasses to make short videos that illustrate the bank's culture. Community banks are fiddling with the filters, too. CenterState Banks in Davenport, Fla., has been testing how different content ideas could potentially resonate with the app's users.” And for a hot minute, it looked like Snapchat itself would launch a robo-advisor like Betterment. Discussing money on Snapchat isn’t so farfetched. As one commentator noted: “ If someone entrusts Snapchat with sending a tasteful nude to their significant other, or new Tinder friend, why not their retirement savings?”
But beware of how the communications in those new markets work. For any online communications, the rules regarding communications will be hard to comply with.
According to FINRA, “SEA Rule 17a-4(b)(4) requires that a broker-dealer retain originals of all communications received and copies of all communications sent by the broker-dealer relating to its "business as such" for at least three years, the first two years in an easily accessible place. This requirement applies to all electronic communications relating to the firm’s business, including emails and instant messages.” It goes on to say “Instant messaging is a developing technology that can pose supervisory and recordkeeping challenges for member firms.”
While FINRA’s 2003 Notice to Members 03-33 on instant messaging was intended to cover AIM and Google chat, it could also cover SnapChat and others. This means the instant messaging rules of 15 years ago may still apply today to entirely new technology. Snapchat is both a social media platform, where users can share and send pictures and graphics, as well as an instant messaging system. Users can chat to each other, as they might do over Facebook’s Messenger, except that unlike Messenger, Snap’s chats disappear immediately. As in once viewed, forever gone. Handy for sending secret messages to your boyfriend when you are 14 as well as when you are 20 to your coworkers about your boss. Not so handy when it comes to conveying information about budgeting and investing.
FINRA’s position is clear as to instant messaging: “Members must supervise the use of instant messaging consistent with the required supervision of e-mail messaging. Depending on the circumstances, instant messaging could be either sales literature or correspondence. Compliance in each of these situations depends on clear supervision and review procedures that are consistently followed. If a member is unable to establish an adequate supervisory program, the member must prohibit the use of instant messaging in customer communication.”
So as to supervision, using tools like Snapchat to communicate is probably a nonstarter. But even if it did help foster communications with clients, the recordkeeping requirements make it even harder. The fact that FINRA rules are on their end helps avoid a question of interpretation on the advisor’s end: “require firms to preserve for a period of not less than three years, the first two years in an easily accessible place, originals of all communications received and copies of all communications sent by the firm or its employees relating to its business. Those rules apply to electronic communications....11”
To make matters worse, some law firms advise their clients that use of programs like Snapchat may cause courts or investigators (like FINRA) to presume the worst: “Moreover… the use of auto‐ deletion apps by key witnesses could be portrayed as suspicious (at best) and deliberately intended to destroy damaging evidence (at worst). Bearing in mind the burden on the complaining party, the question becomes whether a court might allow an adverse jury instruction if the complaining party can show the other party was intentionally using a device like Confide to hide potential evidence. Sending messages through a system that the user knows automatically deletes the message is not likely to excuse noncompliance with legal obligations to preserve documents.”
So, how do you save those Snapchats? Well, as snapchat says “Delete is our default. This means most messages sent over Snapchat will be automatically deleted once they’ve been viewed or have expired.” You’ll have to individually save each snap as it comes through, and note that all saved snaps will be deleted within 30 days. That means downloading snaps to a computer each and every time you chat.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal