Fast-changing features on social media sites are triggering a new wave of compliance challenges for financial advisers at a time when many are just becoming comfortable with the technology in the first place.

As social media sites such as LinkedIn, Facebook and Twitter develop new ways to engage users, financial advisers and their firms will start 2013 with related compliance hassles to make sure they are not running afoul of firm policies. For some, it means adding new policies.

Case in point: a new LinkedIn feature that lets users ‘endorse’ the skills and expertise of other users. That may be a great tool to show off an adviser's professional acumen, but receiving endorsements could also violate securities industry advertising regulations, say compliance professionals.

LinkedIn's ‘Skills & Expertise’ feature is just one of an explosive number of changes in the fast-growing social media landscape. Many brokerages and registered investment advisers, once skittish about letting employees use the sites, now have little choice but to allow access while at the same time monitor outgoing changes to avoid regulatory trouble.

The task can be overwhelming. Last year, Facebook made an average of 41 changes per week, according to Actiance Inc, a software company that provides social media compliance and monitoring services to businesses. LinkedIn and Twitter each made up to four changes weekly.

Many changes are small technical fixes, but others ultimately lead to sweeping new features, said Joanna Belbey, Actiance social media and compliance specialist. They include ways of posting updates to wider audiences for a fee or sending new types of virtual gifts to friends. But these new features, if used, can also push advisers into dangerous waters.

“Social media is going to improve and the rate of enhancements will happen even faster now,” said Michael Byrnes, a practice management coach and president of Boston-based Byrnes Consulting LLC. “It will be a challenge for advisory firms to keep up.”

LinkedIn's ‘Skills & Expertise’ endorsement feature, launched in September, complements an older feature that lets contacts write recommendations for one another.

Users can endorse contacts by clicking on subjects of expertise that hover above each person's profile, such as expertise in ‘venture capital’ or ‘retirement plans’. They can also add new categories. LinkedIn profiles publicly display the names of those who ‘endorsed’ those individuals.

The sticking point: endorsements are testimonials, which are heavily restricted for advisers working at brokerages and the firms themselves. They are not permitted for registered investment advisers, said compliance professionals.

There is only one option for most advisers: Turn off the endorsements feature so they do not publicly appear, suggested Cathy Vasilev, vice president of Red Oak Compliance Solutions LLC in Fredericksburg, Texas. That is especially true for advisers who register with the U.S. Securities and Exchange Commission and are flatly prohibited from using testimonials.

While securities brokers who register with the Financial Industry Regulatory Authority (FINRA) can use testimonials, they must include a wordy disclosure explaining, among other things, that the adviser did not pay for the endorsement, Vasilev said. That could be difficult to squeeze into a LinkedIn profile, she said. What's more, many brokerages have their own policies that prohibit testimonials.

To hide LinkedIn endorsements, click on ‘edit profile’ which is under the ‘profile’ tab. Scroll down to the ‘Skills & Expertise’ section and click on the pencil icon. There is an option to click on ‘no, do not show my endorsements’, using the ‘manage endorsements’ feature.

Some firms eliminate possible social media regulatory snafus by using software that watches out for new social networking features, among other things, and automatically turns them off.  The service, available through companies such as Actiance Inc and Global Relay Communications Inc, can cost between $5 and $25 monthly per adviser.

That can buy some time while firms get up to speed on new features and develop policies for their use, such as requiring advisers to hide endorsements, or bar them from sending gifts.

Firms that have not fully thought out their social media compliance programs should shy away from the sites to solicit clients, said Jervis Hough, founder of Taurus Compliance Consulting LLC in Aventura, Florida.

Before they undertake client solicitation, advisers must be taught how their existing policies apply to certain activities on social networking sites, he said.

Also, advisers who pay to ‘promote’ their Facebook posts and Tweets, for example, could easily run afoul of industry and firm communication rules that require safeguards, such as preapproval from the compliance department, said Hough.

Another possible stumbling block is a Facebook feature that lets users send gifts through the site, such as credits for coffee company Starbucks Corp. Regulators and firms have already impose strict limits on gift-giving being tied to business. But advisers could exceed them, or fail to follow their firm's procedures for keeping track of gifts.

Firms and advisers should hold off on ramping up social networking activities until they put compliance parameters in place, Hough said.