If you’ve read beyond the headline of this post, thanks for sticking with it. We’ll try not to cause undue stress with a compliance topic. But it’s an essential topic: Having a solid compliance-approved media policy is critical to any investment-related public relations program.

For some firms the policy may be as simple as “no one talks to the media.” As a 35-plus year veteran of financial media relations, I don’t know where to start on why this policy is counterproductive. Such a stance can undermine a company’s reputation and still not keep your firm out of the media. But that is a subject for another post.

We’ve seen some firms whose experts entertain most requests for interviews and other firms who beg off on numerous requests. The reason for the variance depends on the firms’ media policy which can be influenced by a number of factors—the way the firm is registered, whether it is publicly traded, the licenses or credentials of the spokespeople.

Most firms recognize the value of a strong media relations program and at the same time realize the necessity of some compliance constraints. Smart firms have robust media policies to help guide their interactions with the media and help media sources know what they can and cannot say to the media.

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In our experience, the PR team generally initiates the media policy process and works closely with compliance to create the guidelines.

Vet all interviews

A good place to start is to create and communicate your firm’s process on responding to media requests. It is a good practice to ask that all interviews are vetted and cleared through the PR team or the person designated to handle communications at your firm. If a reporter leaves a message with a portfolio manager or a financial advisor requesting an interview, the message can be forwarded to the PR team who can follow up, gather more information about the request, provide additional background and help get the interview scheduled. Some firms may limit interactions to a few spokespeople who are trained and ready to take media calls. Others may let a wider group of spokespeople talk to the media, but still want to know about all interviews and track interactions with the media.

It makes sense for PR to act as the “clearinghouse” for all interviews. There may be sensitive topics your firm does not want to comment on. Or, there could be multiple divisions of a company with an interest in important news. The media team can help navigate any potential conflicts of interest or conflicting viewpoints.

Some firms require that a PR staff representative sit in on all interviews. This can be helpful as the staff member can make introductions, raise important topics not covered during the interview or follow up to correct inaccuracies or share additional information after the interview.  Once a reporter builds a regular relationship with a source, many firms will allow that source to connect directly with the reporter without including a media person.  Those regular media sources should still always keep the PR team in the loop on all interviews.

Compliance concerns about discussing individual holdings 

Compliance concerns about talking with the media often relate to discussions about individual securities. Most seasoned compliance teams understand that discussions about portfolio holdings in interviews is not in and of itself problematic.

We’ve seen many firms navigate this issue with a robust media policy that offers guidance on what a portfolio manager can and cannot discuss and, if they do mention individual holdings, what they should disclose. Most prefer that portfolio managers don’t make individual stock or bond recommendations. Instead, they suggest that if a portfolio manager discusses an individual company or holding the mention should illustrate their investment strategy versus promoting a name in their portfolio.

Leveraging the media mention with reprints and replays

When a portfolio manager is featured in a positive story or a meaningful media appearance and marketing (and sales) would like to share the news, some conservative compliance teams will limit the re-use of content that either mention individual securities or cite product performance.

However, most will allow the re-use provided it includes appropriate disclosures. The media partners are accustomed to this, and will work with you. Your media licensing agreement often provides for your editing of a video to appear on your site, and reprint departments will allow you to add disclosures—including average annual total return tables—to the end of an article. In some cases, as part of the reprint process they will even allow limited edits within an article to correct an error or inaccuracy or even address a compliance-related concern.

Revising the content after the fact in order to satisfy “sales literature” requirements will introduce a slight delay to the availability of the re-use but don’t let that stop you. Repurposing a media mention adds to the return on the opportunity for all involved.

“Some may limit trading in a stock for as much as 10-15 business days after mentioning it in an interview. And these limitations can apply across an investment team.”

Compliance also gets wary about any trading activity in companies that are mentioned in interviews. Portfolio managers are discouraged from discussing any stock they’ve recently traded in or plan to trade. Similarly, portfolio managers may be restricted from trading in a stock they mentioned during an interview. The purpose of these restrictions is to avoid any appearance of trying to manipulate the price by, for example, talking positively about a company in order to drive up the price and sell it. In order to monitor this, some firms require PMs to email compliance to document any stocks or securities discussed during an interview. Some may limit trading in a stock for as much as 10-15 business days after mentioning it in an interview. And these limitations can apply across an investment team.

While some may place limitations on trading, most policies aren’t so strict as to prevent a portfolio manager from doing what they believe is in the best interest of clients. For example, if a material change in the environment occurs and a portfolio manager needs to buy or sell in response during a period when they may be restricted from trading due to an interview, most media policies will allow them to make a change, but to document the buy or sell decision and the reasoning behind the change. Compliance must then monitor exceptions and confirm details.

Performance: another hot button

Mutual fund or ETF performance discussions are also likely to raise concerns for compliance. As with written marketing materials, compliance also discourages discussion of performance during interviews. Here they are worried about “cherry picking,” anything that might position investment performance in a positive light without showing the full performance history or standardized returns. Compliance is also concerned about anything that may imply that past performance might repeat. Best practice for sources is to try to avoid discussions of performance or, if performance comes up, to share a link to the fund’s standardized performance information.

Good media policies are the backbone of financial PR

The heart of a good media policy is to make sure that interviews follow the same basic compliance rules marketing teams must follow to encourage transparency, accurately represent performance, and avoid any conflicts of interest. Well written media policies can help portfolio managers avoid these pitfalls. They provide useful guardrails on what can and cannot be discussed. And spelling out the process can help the media team eliminate confusion and manage expectations, as well.

Lowe Group offers a range of media relations services. To learn more, send us a note and we’ll follow up with you.