FINRA Passes New Photocol Rule to Combat Advisor Visual Fraud and Misrepresentation
Accurate Advisor Photo Representation:
Visual Fraud Prevention now FINRA’s top priority.
All advisor profile photos must be updated monthly and provide an accurate representation of the advisor.
Advisor photos will be added to BrokerCheck® this summer.
April 1, 2018
Unbelievably, FINRA is requiring that an advisor’s profile photo be a current and accurate representation of what the advisor looks like and how they dress.
FINRA’s Dick Tator is in charge of the Photocol Enforcement. He explains the reasoning behind FINRA’s new rule, “This rule represents FINRA’s effort to curb the alarming amount of visual fraud perpetrated by advisors against investors. By misrepresenting their looks, normal work dress style, or office environment to investors on websites and social media, advisors have shown yet again that they can’t be trusted.”
The Photocol press release explains that the “accuracy” and “reality” of the advisor photo will be used to measure the photo compliance.
Protocol states that for photos to be accurate they must be current. Therefore, all FINRA registered advisors must update their profile photos every 30 days on all professional purpose mediums. This includes website, LinkedIn, Twitter, Facebook business page, and any other site or place where advisor posts a photo in their professional advisor capacity. No stock photos can be used for the advisor or their staff.
Tator explains, “Some of these advisors falsely purport themselves as sharp looking advisors and staff by using stock photos of models. In reality, they are just regular looking folks. Having a photo on your Linkedin account that is 10-15 years old is also a visual misrepresentation. Using an old photo taken before you lost half your hair or gained all that weight is false advertising to an investor.”
“It’s not that we don’t think visually un-appealing advisors can’t effectively manage money for their clients, we know they can. We just want to make sure potential investors, especially the attractive people with symmetrical faces, have received an accurate visual representation before they even waste time meeting with the advisor. We don’t want any investor to feel pressured to hire an advisor they find visually offensive when what they thought they were getting is the version they saw in the photo,” Tator said.
Photos must represent reality. No airbrushing or filter modifications of any kind. No out of focus photos. If a suit and tie are worn in the profile photo then a suit and tie must be worn to work as well. The reality of the photo must match the reality of the advisor’s professional work environment.
Dick Tator explains, “If you are wearing a suit in your photo but normally don’t wear a tie or even a jacket almost every day at work, then that is image misrepresentation. If an advisor’s profile photo played even a small role in the investor choosing that advisor to manage their money, then the representation should be in line with reality. We are telling advisors that while it is important to wisely and ethically manage investor’s assets, you also need to look good doing it.”
Dick Tator is quoted in the press release explaining how compliance with the new rule will be enforced.
“We’ve hired a Photocol photo monitoring staff to check profile photos each month. FINRA has given me a budget big enough to conduct random and unannounced photo audits on 20% of advisors each year. In addition, all annual compliance audits will now include Photocol policy compliance. But our reach will be much larger than this.”
Tator explained, “We are encouraging investors through a massive BrokerCheck® Photocol advertising campaign to start taking photos of the advisor when they first meet with him or her and of their office environment. They can then upload the photo and advisor’s name into BrokerCheck®.”
If an advisor exceeds 3 Photocol violations in a single year they are fined $10,000 per violation and will be considered by FINRA as recidivist photo offenders.
Read FINRA’s Photocol press release.
Read FINRA Photocol full list of rules.
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