Wells Fargo tells advisors to stay off Facebook business pages

Amid tightening scrutiny of wealth managers' communications on messaging services and social media, Wells Fargo is telling advisors that Facebook business pages are off limits.

Wells earlier this month instituted a policy no longer granting advisors access to Facebook business pages, according to sources with knowledge of the matter. These special pages offered through parent company Meta's premier social media site allow users to market their businesses. Wells' ban on Facebook business pages, the sources said, had to do with the firm's ability to capture, monitor and archive data from the sites.

This isn't the first time Wells has set limits on access to a particular social media site. In 2020, it cited security concerns in telling employees to delete the controversy-ridden TikTok app from their phones.

Many of Wells' rivals set limits on what advisors can post on more mainstream social media sites but still permit on posting Facebook, LinkedIn, Twitter and Instagram. Morgan Stanley, for instance, allows advisors to have firm-approved LinkedIn profiles, Twitter handles and Facebook business pages for business purposes.

April Rudin, the founder and CEO of The Rudin Group marketing firm for wealth management companies, said she thinks Wells' new prohibition is unlikely to weigh heavily on the firm's advisors. She has always viewed Facebook business pages as a sort of also-ran to LinkedIn, the social media site owned by Meta's tech rival Microsoft.

Rudin said she thinks most people go to Facebook for personal connections rather than to find wealth managers or seek professional advice. That made Facebook an unlikely place to mine business prospects in the first place.

"They probably just didn't find it to be very productive and it was too much time and expense," she said.

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Wells, whose employees still post on LinkedIn, said in a statement, "Providing our advisors with a compliant social media presence remains a priority. We have a robust suite of customizable, compliant resources available to our advisors."

Although not counting Wells' policy on Facebook business pages as a huge loss, Rudin said firms would be wise to move cautiously when considering bans on social media. TikTok may be a steady source of controversy in U.S. politics; it's also, she said, a very good way for advisors to reach out directly to younger audiences.

"It really depends on the firm," Rudin said. "There are plenty of asset managers using TikTok for financial literacy content. They are using it for brand awareness. It's the way a lot of younger people have heard of Vanguard and BlackRock."

Wells' policy barring access to Facebook business pages comes after Meta made changes to its so-called application programming interfaces, or APIs. APIs are systems that allow separate pieces of software to communicate with each other.

Robert Cruz, the vice president of regulatory and information governance at the compliance firm Smarsh, said Meta is far from the only tech company to adopt recent changes to its APIs. Microsoft and X (formerly Twitter) have taken similar steps making it harder for firms to monitor and record advisors' business-related discussions. Smarsh is one of many companies providing systems that track communications for regulatory purposes.

One of the biggest reasons firms have for changing their APIs, Cruz said, is that they want to preserve any data they collect from users to feed into their proprietary artificial intelligence systems. The more of such information that's released, the more likely it will be used to train rival AI systems.

An unfortunate consequence of these new restrictions, Cruz said, is that they make it harder for financial firms to meet their regulatory obligations.

"It's a major challenge for firms, considering many larger firms support 50 to 100 communication sources," he said. "To try to stay in sync with all those while they're making these sorts of changes is a very complicated problem to solve."

Meta did not immediately respond to a request for comment. Cruz said tech companies don't change their APIs merely to preserve data for artificial intelligence. Sometimes they simply find their data-extraction systems aren't keeping pace with the amount of data being sent over them and are in need of an upgrade.

"Within a [Microsoft] Teams chat, for instance, you can have a discussion with 50 to 100 participants," he said. "It may not be efficient to extract that data using the same API you first used years ago, given the volume data you need."

The pressure has been steadily mounting on firms to monitor and record everything their advisors are saying in messages about their business dealings. Regulators have handed down nearly $3 trillion in fines in recent years in a display of just how serious they are about making sure firms live up to their obligations to monitor communications between employees and with clients.

No big-name Wall Street house has been spared. In December 2021, the Securities and Exchange Commission and the Commodity Futures Trading Commission both hammered JPMorgan with a $200 million fine after finding that employees as high as the senior level had used WhatsApp and private email services to discuss company business. Roughly a year later, the two regulators returned to impose $1.8 billion in fines on Goldman Sachs, Morgan Stanley, Bank of America, UBS and other industry stalwarts over similar alleged violations.

Subsequent sweeps have hit such well-known firms as Wells Fargo and BNP Paribas in August last year, and Northwestern Mutual in February.

Most of these cases have centered on what are known as "off-channel communications" — typically text messages sent using WhatsApp, Facebook Messenger or other encrypted services. But Joshua Broaded, the head of global regulatory compliance at ACA Group, said firms need to be just as aware of what their employees are saying and doing on social media.

That's true not just because of prohibitions on "off-channel communications" but also because of limits laid down by a new marketing rule the SEC began enforcing in late 2022. Because it governs any communication about advisory services sent to two or more current or potential clients, the new rule could encompass any wealth management message on social media. Among other things, it requires advisors to avoid forecasting investment returns that can't be backed up with evidence.

So far, the marketing rule's enforcement has fallen only on smaller firms. But there's no reason employees serving in an advisory capacity at larger firms couldn't also be tripped up.

"There is a somewhat similar dynamic in that there is an archival and a supervision element," Broaded said. "And so if firms are allowing employees to communicate on these forums, but not capturing and bringing in their controls to the environment, then they have some similar kinds of exposure."

Rudin said she thinks advisors generally know what's appropriate to say on social media and what's better left for other situations.

"You're mostly going to find people posting more personal type of posts that don't become a compliance issue. That's what gets more engagement," Rudin said. "So you're not going to find advisors who say, 'Buy gold now,' or 'Roaring Kitty's back.'"