Editor’s’ note: I read this column with intense interest. Updating a website is my life and I’m more than aware how quickly information gets stale. I loved what I read here. Wanting more, I fired off an e-mail to Les and I ran my questions and his answers at the bottom of this column.

As you know from my previous postings, I am not the most technical guy in the world. To paraphrase Will Ferrell’s character in the movie, Blades of Glory, I’ve “learned to work the Google on the internet machine.”

Despite my technical limitations, I have reviewed hundreds of advisory websites for compliance purposes. Based on those reviews, I am shocked at the number of registered investment advisers (RIAs) that launch a website and neglect to update it on a regular basis. It is imperative that RIAs routinely dust off the cobwebs on their website.

Even if website content met regulatory standards initially, it may become false or misleading over time. Stale information on an RIA’s website may violate Rule 206(4)-1 under the Investment Advisers Act.

As an example, examiners frequently criticize RIAs in deficiency letters for misstating their assets under management.

On many occasions, the firm failed to scrub its website of outdated information. Quite often, these outdated figures are contained in old articles and newsletters posted on the website.

Old privacy policy

A neglected website might fail to mention new services offered by your firm or ones you no longer offer. The website might discuss broker-dealers and fee arrangements that you haven’t used in years. Another danger is that the content will be inconsistent with your latest Form ADV disclosure document. I am also encountering numerous RIA websites that have an old privacy policy posted.

I have encountered websites that refer to investment adviser representatives (IARs) who now work somewhere else. In addition, because the content has not been updated, bios might fail to show how much experience each IAR possesses and new designations that may have been earned in recent months.

Outdated performance results can also cause compliance problems. Examiners may suspect your recent performance is not as impressive and that is why you haven’t updated your results. The real reason, especially at RIAs that don’t have a techie on staff to update their website, is that the firm hasn’t gotten around to changing the figures.

Aside from the potential compliance problems that may arise from a website filled with cobwebs, you are undermining your marketing campaign. I have reviewed too many websites where there is nothing new on the “What’s new?” screen. I will usually find an article or press release from years ago when the website was launched. This situation raises questions in the minds of prospective clients. It might make them think that the RIA hasn’t done anything noteworthy in years.

Few people make a return

I find that these same websites fail to update any of the educational content offered. An article or White Paper that discusses taxes, estate planning, or retirement accounts might be woefully out-of-date. Few people make a return visit to a website that gives them the 401(k) contribution ceilings for 2005. They are also likely to be frustrated if the links to other websites no longer work.

To avoid problems, all website content should be approved by the firm’s compliance department before it is posted. Furthermor, an adviser’s chief compliance officer (CCO) or a designee should monitor the website regularly to make certain that the content is still fresh. The firm’s policies and procedures should mandate that this review will take place at stated intervals.

If you do some checking, you will discover that many RIAs need to take some time to dust off their website cobwebs. It’s easy to check. You just work the Google on the Internet machine. [SEE MUCH MORE IN Q&A BELOW]

Les Abromovitz is a senior consultant for National Compliance Services, Inc. (www.ncsonline.com). Les, an attorney, is the author of Growing Within the Lines: The Investment Adviser’s Advertising and Compliance Guide (Available on Amazon.com or through NationalUnderwriterStore.com). He can be reached at 561-330-7645, Ext. 213, or LAbromovitz@ncsonline.com.

To read Les’ last column: “10 top ways to use social media without courting regulatory trouble” CLICK HERE

Brooke Southall: You write: “Quite often, these outdated figures are contained in old articles and newsletters posted on the website.” Does the advisor have to update old articles written by outside sources where the date of publication is clearly indicated?

Les Abromovitz: No, an adviser shouldn’t change the article. If it contains information that is now misleading and is inconsistent with the RIA’s current business model, the article should be removed from the website.

Southall: A number of the issues you mention like old fee arrangements and privacy policies have the ring of that tilted sign at the old diner. They’re definitely embarrassing but are they also a potential compliance problem, too?

Abromovitz: I believe these are serious deficiencies. I see these kinds of mistakes every day. My goal is for these examples to cause a light bulb to go off in the CCO’s head. These mistakes can lead to compliance and legal problems.

Southall: Is an advisor better off having no website at all if they have no time to update it?

Abromovitz: A website is one of the best marketing tools an RIA has. It adds to an RIA’s credibility. If a website is worth launching, it is worth keeping up to date. It shouldn’t be a repository for non-compliant marketing materials. I’m seeing RIA websites that look like they haven’t been updated in months or even years.

Southall: How big a problem is it for assets under managements to go out of a date on a website?

Abromovitz: Misrepresenting assets under management can lead to an enforcement action against the RIA by the SEC. In a recent SEC enforcement action, the RIA had overstated assets, because the adviser believed that big clients don’t like to deal with small advisory firms. If you are going to brag about your assets under management in marketing materials, you’d better keep them up to date.

Southall: Thanks, Les.