Signal Boost Financial Blog

A top Morgan Stanley Smith Barney compliance officer said recently the company has been surprised to discover that its financial advisors in their 50s and 60s were achieving more success in the use of social media than younger advisors.

The comment was made at a recent panel on social media in the financial sector at the NASAA Public Policy Conference in Washington, DC, by Mitchell Bompey, executive director of the legal and compliance division.

Counter-intuitive? You bet. I was on the panel and surprised to hear it. Although a later call to Morgan Stanley to follow up revealed no real statistics, I was told there was a ton of anecdotal evidence to back up the statement.

They Really Get It

My experience introducing and training Baby Boomers and older Gen-Xers in the use of social media is far too frequently like pushing the proverbial rock up the hill. But once they get it, they really get it. It is a revelation for many to understand that social media is just a new way to manage relationships.

Why are older Morgan Stanley advisers finding success using social media? It could be that younger advisors are still building their books. The average MSSB advisor tends to skew older and has already assembled a roster of clients and knowledge, but most realize that the social media wave only getting bigger. Some are surprised to find that many high-net worth investors are already using social media.

The older advisors have also seen the research that indicates when their clients die, 90% of their childrenswitch advisors upon inheriting their parent’s money. Even if their clients are not on social media, their heirs probably are. Social media allows older advisors to raise their profile with children and grandchildren in a low pressure medium.

Pilot Phase Almost Over

Morgan Stanley’s wealth management division was the first wirehouse to experiment with social media. In May, 2011, the firm announced in an internal memo that 600 financial advisors out of a total advisor population of some 17,800 would participate in the pilot. Social media platforms would be limited to two: Twitter and LinkedIn, although some advisors have blogs on their websites.

Most of the focus initially was on Twitter, but LinkedIn has proven to be the primary vehicle for social media engagement by advisors. The rules are less oppressive. The first status update must come from a library approved by compliance. But if someone replies with a public message on the advisor’s LinkedIn profile or on LinkedIn Home, the advisor can respond without pre-approval.

Twitter, on the other hand, is more constrained. All tweets need preapproval, except for direct messages. A recent report that a subset of the pilot group of advisors was being allowed to tweet without preapproval is not correct, although it is under consideration.

Excitement is Building

There is a lot of excitement in the ranks of advisors not participating in the pilot and they want to begin using social media as soon as possible. Before that happens, they will need to go through training that focuses on understanding the firm’s social media policy, how to properly use the platforms, and IT security.

A staged roll-out over two to three months to the wider population of advisors is anticipated soon. Just how soon depends upon Morgan Stanley Smith Barney’s executive director of legal and compliance. 

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED. 

Allow me to start with a complaint. Why would The Charles Schwab Corporation put “60 seconds” in the title of its new video series when the videos average two minutes? I guess you could argue the long-running television program “60 Minutes” is less than sixty minutes when you take out the commercials. But isn’t it on for an hour?

Okay, now that I got that out of my system: I come to praise Schwab, not to bury it.

The San Francisco-based financial firm’s new video series is all that it should be and everything its competitors should be trying to attain. But they better act fast; first mover advantage and all.

Take a look at a video in the Schwab: 60 Seconds in Money series on YouTube. 

A good-looking 20-something, Mike Cianfrocca, welcomes viewers in the first episode to “a light-hearted look at money-related news.” He sports a hip, closely trimmed mustache and beard, a smart pair of glasses, and a shirt and tie. Graphics pop in and out of  frame.  Mike may not rival Jimmy Fallon, but the humor isn’t bad, as in an episode when he says, “an IRA may be the only thing parents understand in their children’s text messages.”

Like other advisory firms, Schwab understands there is a tremendous transfer of wealth happening now. According to a study by the Investment Management Consultants Association in 2011, once parents die, 98% of children jettison mom and dad’s stodgy, old financial advisor for some other arrangement. But unlike other firms, Schwab is positioning itself to take advantage of this key life event by appealing to Millennials. An advisor in a blue suit, white shirt, and tie sitting in his office ain’t gonna make it.

England & Illinois

There are others that understand the shift. Pete Matthews, a financial planner in England who shoots his videos out of doors in beautiful locations around Cornwall. Meaningful Money is the name of his YouTube Channel. 

Then, there’s Carbondale, Illinois-based Jeff Rose of GoodFinanciaCents.com, whose videos have been viewed on YouTube some 73,000 times.  Why? Because he speaks to Millennials in a way they understand. Watch him bust a move! (BTW, in Schwab’s second video in their new series, they refer to the #RothIRAMovement—created by Jeff Rose.)

Videos? Really?

About three years ago, when I was still at NYSE Communications, I attended a seminar put on by PR Newswire on social media. The room was filled with accomplished but nervous-looking 40- and 50-somethings, like me, along with a younger crowd, who were trying to figure out this new phenomenon called social media.

I remember only one thing that the speaker said that afternoon. Why would you want to read when you can watch a video?

The younger people at the seminar all nodded and murmured in assent. I was aghast because I believed—and still believe— that the written word has a depth of knowledge and insight that a video can never convey. But I’m swimming against the tide. After all, YouTube is the Internet’s second most popular search engine. 

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED

It may have been founded in 1871, but the National Association of Insurance Commissioners (NAIC) is helping its community to communicate in a very 21^st Century way.

A white paper by the association’s social media working group is providing important guidance for U.S. state insurance regulators and the industry on how to use the revolutionary medium.

Several state insurance regulators are active in social media. The two Washingtons (state and the District) are leaders in Facebook and Twitter. The Washington Insurance Commission has over 1,700 followers in its Twittersphere, while the D.C. Department of Insurance, Securities & Banking, is a consistent Tweep, with some days seeing multiple posts.

North Carolina is big on Facebook, posting several times a week. The Tarheel state’s videos on YouTube have been viewed over 2,900 times.

As of April 2011, nine state insurance commissions had Facebook pages, 12 had Twitter profiles, and seven had YouTube channels.

Gotta Fix That

Several insurance commissions are already addressing the use of social media by firms licensed to operate in their state through market conduct investigations and the consumer complaint process.  

But many others face difficulties due to strict state policies that prohibit any state government employee from accessing social media at work. If you can’t create a Twitter profile or sign on to Facebook, you’re not going to make much progress as a regulator of social media. Meanwhile, there is a galaxy of activity growing outside your door.

Everyone Needs a Plan

Leadership in their 40s and 50s often find social media mystifying and frightening due to potential errors that carry heavy penalties. But it is a clear mistake to ignore it. After all, some of the largest insurance companies, like State Farm with 1.4 million Facebook fans and Progressive with its videos on YouTube viewed 11 million times, understand the power of social media and are using it in sophisticated ways.

Homework

The working group did their homework. In the research leading up to writing their white paper, they talked to a variety of stakeholders—including consumer groups and non-insurance regulators. And they came up with pretty good guidance.

Among the white paper’s findings:

• An insurer’s policies, procedures and controls… must comport with existing regulations, which include, but are not limited to, statutes and rules related to advertising and marketing, record retention, consumer privacy and consumer complaints.
• An insurer is responsible for all social media content it posts to any of its own directly sponsored sites/spaces and may be responsible for posts of third parties.
• An insurer is responsible for the content of its appointed producers’ posts, if such content can be attributed to the appointing insurer or the insurer’s products or services.
• It is the responsibility of each insurer, agency and producer to determine whether a particular vendor, technology, system or program provides the appropriate privacy, retention and retrieval functions necessary to comply with the various state statutes and rules relative to recordkeeping.

Differences between static and interactive communications, Adoption and Entanglement, risk-based principles of supervisory review are also examined.

I have always been a law-abiding Tweep.

So, seeing a pink banner from Twitter police splashed across the top of my profile last week was a real shock. Seeing all of my followers and those I follow reduced to zero rattled my core. I rely on Twitter, as do our clients. After all, social media and digital marketing is what we’re all about at Relay Station.

It all started, I thought, when I Tweeted this:

Eight, Count ‘Em, Eight

Eight different accounts— it’s too generous to call them people— sent me the exact, same tweet. The only difference was their name, bio (if there was one), and avatar. In each case, the “person” was an attractive female or male.  They were phishing; hoping I would click on their link, download malware, and turn my computer into a criminal bot or worse. I blocked a couple; reported the others as spam.

The next morning, on April 5, I Tweeted the message above. Later that morning, I Tweeted once again about something else. That afternoon, I sat down to write a post for my blog, checked Twitter, and saw that I had been slapped with a pink banner. I was immobilized. Suspended. I could hardly eat lunch.

Speechless

Twitter offered a link to a government-like form where I was given the chance to state my case. I marshaled my facts. No attorney. Just represented myself.  Would I even hear back?

Minutes stretched into days. Would I have to create a new Twitter account? Use Google+? Change careers? What had happened to me? I felt like a twit.

Revenge?

Unable to sleep, I thought of a story my daughter’s Italian boyfriend had told me. Not Italian-American. Italian- Italy. The boyfriend’s cousin and her husband had been the victim of an armed, home-invasion and robbery. The police captured the robber. But their lawyer advised the victims to not pick him out of a line-up. The sentence would be brief. The robber was the type who might come back for revenge.

I got up and walked around the block, mulling over various paranoid scenarios: after multiple phishing attempts, then warning my followers about it, did the bad guys come after me? Report me as spam?

Oh Happy Day

Saturday arrived and I thought I’d check my suspended account and—a sigh of relief–I was back. With all of my followers and all of those I followed! The pink banner was gone. No explanation. But I was restored.

On April 9, I received an email from @Twitterzendesk.com.

“Twitter has automated systems that find and remove multiple automated spam accounts in bulk. Unfortunately, it looks like your account got caught up in one of these spam groups by mistake. I’ve restored your account; sorry for the inconvenience.”

The email was from an actual person, whose name I don’t want to reveal. After all, I don’t want her, uh, whoops. I mean, I don’t want that person to get mad, seek revenge, and deTwitter me forever. 

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED

The movement launches on March 27. It’s not out to solve world hunger or end any wars. It is, simply, an effort to make young adults aware of the advantages of the Roth IRA.  

Say what?

That’s right. The Roth IRA. It makes a world of sense and I am, frankly, completely excited about it. There are several reasons for my enthusiasm.

Soldier of Finance

The #RothIRAMovement is the creation of Jeff Rose, Carbondale, Illinois-based founder and CEO of Alliance Wealth Management LLC. Jeff was the subject of the first blog post I ever wrote. In his brief bio on Twitter, Jeff describes himself as a “Jesus & family lover, financial planner, Iraqi Combat Veteran, 1st book: Soldier of Finance, In-N-Out Burger addict, Crossfitter, #takeaction financial expert.” Not your usual financial advisor bio.

But Jeff speaks directly to those folks most advisors only wish they were talking to: young adults. On Twitter, he has over 6,100 followers. His YouTube videos have been viewed over 58,000 times and his most recent video post, “Financial Rant: Making Pennies into Millions and Magic Bunnies to The Rescue” is a hoot. On his blog, “Good Financial Cents,” the most popular post is, “7 Financial Advisors I would like to Punch in the Face.” You might find his approach, well, undignified. But his business is growing.  Is yours? 

Birth of a Movement

Recently, Jeff spoke to a class of graduating seniors at his alma mater, Southern Illinois University at Carbondale. At one point, he surveyed the class about how many had heard of the Roth IRA. Not one raised their hand. On his drive home, Jeff kept asking himself—does it matter? He concluded:

“Yes!” it is a big deal. More young adults need to know what the Roth IRA is and how it can have a tremendous impact on their life. I was determined to start a movement.”

So the #RothIRAMovement was born.  It’s not just about the tax-free advantages of the Roth IRA, but about the advantages of starting to invest when you are young.

Young Personal Finance Bloggers

It helps that Jeff is actively involved in a growing force of mostly young personal finance bloggers. Operating under the radar of most supremely serious financial types, the first Financial Bloggers Conference
took place in Chicago in October, 2011. Jeff video blogged on the conference and it is not to be missed.

As of today, 126 bloggers, financial companies, and media sites have sent Jeff a Teet or other message to inform him of their intention to post about the Roth IRA. I bet those numbers are going to grow.

 What Are You Waiting For?

I meet so many advisors who are fearful or dismissive or still trying to figure out the basics of social media. Too many are frozen by inertia, even as they ruminate on how to reach younger clientele. Others are afraid that the “rules have not been clarified” by the regulators–which is another excuse for inaction. Although there still are a few areas that are unclear–Facebook Likes being one of them–the fact is that FINRA, the SEC, and other regulators have established a clear body of guidance. 

Jeff Rose has a warrior’s attitude. He’s using the latest tools and techniques available to him. It is a movement. He’s just the first one to call it that. 

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.

It is common practice in web strategy to drive users of your social media content back to the mothership–your company website where all sorts of approved content resides.

iShares has a different approach. Their social media strategy is to increase consumption of branded content –specifically iShares blog posts. By doing so, they build awareness that promotes the purchase of their product by investors and financial professionals.

iShares is owned by BlackRock. So they start with a solid level of brand awareness. Nonetheless, there is a constant need to share their expertise in order to help build market share for iShares ETFs and other products.

Life Cycle of a Post

At a recent NICSA conference that I attended, an iShares executive made a presentation about the life cycle of a blog post, “Dividend Growth: Volatile Markets Revive an Old Investing Strategy.” Once the post was born, it was posted to the iShares website, the iShares Facebook page, and to the iShares Twitter account three times over the course of the day, as is standard practice. But that was just the beginning.

The Atomic Unit

Also employed was Twitter’s “atomic unit”– the Promoted Tweet. A Promoted Tweet is a message from an advertiser that appears near the top of a user’s feed. This is the centerpiece of Twitter’s advertising strategy. Each time a Promoted Tweet, Promoted Trend or Promoted Account is clicked, the advertiser pays. The more clicks, the more often the Promoted Tweet appears. Twitter claims an engagement rate of 3-5 percent—which is high for online ads.

Syndication

A sophisticated syndication strategy was also used. iShares social media team ranks syndication sites by tiers and reaches out to them one by one. Here is how they are divided up:

• Tier 1 — well known sources/high traffic
• Tier 2 — less known/up and comers
• Tier 3 — individual influencers
• Tier 4 — strategic partners’ intranet sites
• Tier 5 — other influencers/celebrities

Awareness & Engagement

By the end of the blog post’s life cycle, an impressive number of people have become aware or actually engaged with the post. Here are the numbers: 

• Post on iSharesblog.com – 877 awareness, 3 engagement
• Syndicated to financial websites – 9,819 awareness, 31 engagement
• Tweets – 98,400 awareness, 31 engagement
• Posted to Facebook – 4,455 awareness, 7 engagement
• Promoted Tweet – 38,349 awareness, 372 engagement
• Shares, Mentions, Retweets – 11

        TOTAL: awareness 151,998, engagement 574

On the most basic level, awareness, a viewer can see the iShares logo, headline, and often an introductory paragraph or more on various social media platforms. iShares refers to this as the “passive engagement” level, where users can interact with the content. The type of engagement differs depending on the channel. On the blog, one can easily comment, Like, Tweet or share. On Twitter, it’s easy to ReTweet, respond, etc.  Facebook has its own engagement features.

There is another level of engagement in the iShares social media world, currently referred to as Engagement 2.0. At this level, user generated content—such as this blog post—or maybe a photo of the iShares logo pinned on Pinterest, generates further brand awareness.

Based in San Francisco, iShares social media team is exploring new frontiers.

An estimated 70 percent of larger asset management and insurance firms anticipate they will be blogging within the next year, if they haven’t already started. Too many mid-size and smaller firms, unfortunately, are still trying to figure out what this Twitter thing is all about. But that will change soon enough.

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.

Senior managers in highly-regulated financial firms are hearing the same question from younger team members: when can I start using social media to build my book? 

There are fewer reasons to say no with every passing day.

As I wrote previously, the first step in creating a social media program is to establish a corporate web presence.That is a multiphase process itself. Once that’s done and working well, you can begin to fold in a wider population of line employees or contractors in the network.

But in doing so, the risks increase. The primary risks in any financial social media program are:

• data leakage
• brand damage
• e-discovery, and
• compliance-related issues.

Many financial firms, from some of the largest on Wall Street to small investment companies, are inhibited from launching a company-wide program due to these risks.

Test it First

That is why a pilot program makes sense. Out of a pool of volunteers, a number of employees can be chosen. This small group can be provided with the same training foundation given to the core team that operates your corporate social media effort.

But there is a difference. Now you are going beyond corporate brand building to permitting your people to use the medium for business development.

Questions of Trust

The broker-dealer, investment firm or insurance company needs to decide how much freedom the rank-and-file is allowed when using social media.

• Will employees be trusted to post, tweet, and share in a manner that does not violate the Concept of Adoption and Entanglement?
• Or, will employees be provided a pre-approved list of communications?

I’m a big believer in trusting your people to represent the company properly. Of course, that’s after they’ve been thoroughly trained, an archival system that monitors for key words and phrases (“double your money” or “can’t lose”) is set up, a disciplinary program is in place, and other key elements of infrastructure are ready. You trust them, within limits, to represent themselves and the company in public, don’t you?

Whichever approach is decided upon, a pilot program makes sense. Lessons will be learned. Adjustments can be made before rolling out the social media program throughout the company or network. And that time is coming.

Be brave.

Need help with your program?

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.

Social networks are surveillance platforms for bad guys. If you’re not careful, you can be tricked and attacked by criminal syndicates trying to siphon funds from your company’s treasury, state sponsored organizations that want to hijack your company’s intellectual property, or maybe anonymous teens bent on making a political statement. 

The sad fact is that if you touch the web, you’re vulnerable. That’s why a critical part of any social media program must be security awareness.

Your IT department should be mounting an aggressive defense. The security effort might be the responsibility of a staff of dedicated professionals or a single, expert consultant. Data classification, perimeter protection, secure browsers, and prevention of data leakage are some of the elements of a solid IT security program.

The Weakest Link

But the single, biggest point of vulnerability is you. According to security experts, criminals now generally avoid a frontal assault on a company, selecting instead carefully chosen targets that they go after away from the office.

If you are active on the web, information about you is available in many places: LinkedIn, Facebook, Twitter, an Internet search, or other websites. Once you are the target, criminals will attempt to get you to click on a link that is sent through email or, increasingly, in an invitation or post on Twitter or Facebook.

Unfortunately, it’s not hard to get people to click on a criminal link. It requires constant vigilance not to do it. If you’re tired, distracted, or perhaps had a drink or two, your defenses may be down and you click when you shouldn’t have.

Then What Happens?

Once you’ve clicked a criminal link on Twitter, Facebook, or another social media site, malicious code can be downloaded into your computer. In the worst type of cases, this will allow the attackers to snatch all sorts of valuable data about your company that may reside on your laptop or other Internet device. Insertion of a variety of harvesting and penetration tools can allow the capture of your company username and password, giving them the keys to sensitive and confidential data.

What to Do

The first step toward protection is to create an internal and external social media policy that includes sections on data loss prevention. It’s important to know how social media can be used at work. But it is equally important, when thinking through questions of how company employees may use social media at home, to include steps that must be followed to avoid inadvertent loss of company data, as well as what to do when a mistake is made.

There should also be a data loss prevention module in your social media training program. Education and training are critical to the overall effort to fight back.  The variables are changing constantly, so your training should be updated regularly.

Of course, no matter what is done, you can’t prevent employees from acting unwisely at home. But you will have dramatically raised the barrier that keeps criminals out. 

Need help with your program? Contact us. We can help. 

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.

Starting to feel left behind? You’ve been seeing your competitors set up social media programs and hearing tales of new business, growing reputations, and engaged customers. You’d like to jump in, but you’re wary of regulators or where to start. Don’t feel bad. You’re not alone. 

No matter if you’re a financial organization, a consulting firm, a mid-size broker dealer, or advisory firm, stepping into the social media river can be less daunting if you take a four step approach.  For some of you—associations and consulting firms—steps one and four may be enough.

• Step One: Establish a corporate social media presence
• Step Two: Create a pilot program for a handful of employees
• Step Three: Go wide, allowing more employees to participate
• Step Four: Review systems, strategy, and training.

In today’s blog post, I’m going to focus on the first step: establishing a presence. In the future, I’ll write about steps two through four.  I’m not going to detail all that’s involved—just provide an overview. If you need help, my contact information is at the bottom of this page.

Create a Plan

If you are a regulated organization, this phase is required. Your social media plan will need to include how to connect to the company’s archiving and review system, how compliance will oversee communications, and the frequency of monitoring.  Is it permissible to engage on business topics on your personal profiles not subject to company archiving and review? Probably not, so state this and other content standards clearly. This is just the beginning of what needs to be in your plan. 

If you’re not regulated, you still have decisions to make. One is the importance of clarifying your areas of focus, so the operators of your system will know not to stray outside of those limits. That will help to strengthen your differentiation. It helps to state your social media voice and the audiences you are trying to reach. Will you comment on other blogs? If you use LinkedIn, how will it be used?

Build a System  

Set up your social media platforms, analytics, and redesign your website to include web 2.0 best practice elements. If you have regular news or promotions, post the copy to a blog to appear on your home page. The copy can be automatically be distributed through an email list, an RSS feed reader, and—most popularly—on Facebook, Twitter, and LinkedIn.  All profiles should be uniformly branded with your logo, colors, and mission statement. Share and follow buttons should be placed across platforms to increase reach by expanding social networks.  Advanced analytics will measure social media tactics and progress toward your goals.

Engage 

You have several options for how to go about putting your spanking new system into play. You can train those within your organization that will operate your new social media system against your policy and let ‘er rip. Or, you can add a consulting firm for additional training and answer inevitable questions. Another option is to hire a social media marketing firm to handle it all for you. We do that, too. 

Need help with your program? Contact us. We can help. 

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.

“Social media is landscape-shifting” states the U.S. Securities & Exchange Commission in a National Examination Risk Alert, titled “Investment Adviser Use of Social Media,” that was issued earlier this month. That phrase, although kind of odd, does sum up what is happening. 

“It converts the traditional two-party, adviser-to-client communication into an interactive, multi-party dialogue among advisers, clients, and prospects, within an open architecture accessible to third-party observers.”

Change is upon us. Yet it is hard for most financial professionals to understand because of the threat involved:  social media must be used in a regulatorily compliant manner… or else. So, let’s step beyond the fear of an enforcement action to dissect one element of the Alert.

Social Media Policy

The Alert was written after the staff of the Office of Compliance Inspections and Examinations (OSCIE) identified registered investment advisers of various sizes and reviewed whether or not they were using social media in a way that was compliant with federal securities laws. One thing that quickly became apparent was that few had policies written specifically for the use of social media. Overlapping procedures regarding how to properly employ advertisements, client communications, and electronic communications were in place, but they were not specific to the use of social media. In addition, OSCIE found that the following essential elements were frequently missing:

• Guidance about which social media sites were permitted or prohibited;
• How social media could be used to solicit new clients, including the prohibition of specific functions on social media sites;
• Content standards that prevent a registered investment advisor or associated person from violating fiduciary standards or other regulatory issues;
• The approval process including compliance oversight;
• Prohibition of conducting firm business on personal social media profiles; and
• Issues of information security.

This is a “non-exhaustive list,” in the words of the SEC.

Think It Through First

Investment advisors who are regulated by the SEC need to take this seriously. Even if you are a smaller firm or a solo practitioner, about to switch to state regulation, you still need to do this right. 

Once your social media policy is in place, you’re not done. As the landscape shifts, your policy will require re-examination. It’s just the first step in thinking through the use of social media to avoid the hammer coming down on you. 

Need help with your program? Contact us. We can help. 

SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides integrated Internet marketing, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED.