MARTECH MINUTES: A Vendor’s View – ‘FINRA Reviewed’ vs. ‘Compliance Reviewed’

391
concept.

By Teresa Leno, CEO and Founder of Fresh Finance

The Financial Industry Regulatory Authority (FINRA) recently announced that it has fined multiple firms for violating marketing communications Rule 2210. According to FINRA, the fines ranged from $10,000 to $150,000, totaling $ 81 million, and were issued to 16 firms that failed to supervise their marketing materials or did not have adequate systems to review and approve their content. This news comes just a year after FINRA issued a notice reminding firms of their obligations under this rule.

As industry compliance and marketing professionals recognize, the rule aims to ensure that all marketing materials are fair, accurate, and not misleading. It also specifies the required disclosures in these communications, such as risks and fees associated with the promoted product, such as an annuity or a service, such as financial planning.

These headlines remind organizations to examine their advertising and vendor content review policies and determine whether their advisor marketing vendors fully understand what ‘FINRA Reviewed’ and ‘Compliance Reviewed’ mean. With that segue, let’s explore the difference between these two types of reviews.

FINRA Reviewed

Firms may elect to have FINRA review advisor marketing content for a fee. In addition to the review, FINRA issues a letter stating that the content has been reviewed and recommends changes, if required, to make it compliant under Rule 2210.

“The Department helps FINRA members understand and apply these advertising rules through its filings review program, published guidance, and outreach. Through its filings review program, the Department reviews communications submitted by firms either voluntarily or as required by FINRA Rule 2210 and provides firms with a written review for every communication submitted.” – FINRA.

It’s a pretty straightforward process, but the firm must still take the content review process one step further:

  • Approve the Piece of Content for Use with the Public

    Some firms directly provide reviewed and approved content to vendors to make the process more accessible for their advisors. However, firms must note that vendors can not directly submit content to FINRA for review; only member firms can.

    “FINRA reviewed,” as a vendor states— you must determine how this statement impacts your firm’s situation.

Compliance Reviewed

A compliance review is submitting content to a firm’s compliance team for review and approval before use with the public. FINRA member firms must enforce Rule 2210 with their advisors and, in working with vendors, ensure each understands and adheres to the rule.

Content review and approval protocols must encompass compliance workflows, integrations, archiving, and other distribution applications to ensure review and approval before distribution onto advisor websites, blogs, newsletters, and social media. Furthermore, having marketing communications review and approval protocols can help prevent potential legal and reputational consequences.

Conclusion

In conclusion, the recent fines issued by FINRA highlight the importance of marketing communications rule 2210, reminding member firms to develop proper measures to supervise their marketing materials and vendors. Ensuring compliance with the rule’s requirements can help uphold the integrity of the organization, its advisors, and the financial industry.

Contact Fresh Finance to learn more about their enterprise MarTech SaaS content tool for firms with 25 or more advisors


Teresa Leno worked as a financial advisor and experienced firsthand the importance of financial education to help clients make more informed decisions before a crisis. Through her experience, Fresh Finance was started as a financial content marketing solution to help advisors validate their expertise through sharing content.