Published on March 12, 2014
Confidential and Proprietary © 2012, Actiance, Inc. All rights reserved. Actiance and the Actiance logo are trademarks of Actiance, Inc. Leveraging Social Media Amid the Changing Regulatory Landscape Joanna Belbey- Social Media and Compliance Specialist Victor Gaxiola- Subject Matter Expert, Social Media @Belbey @VictorGaxiola #BDI1
2 #TeamActiance Facebook.com/Joanna.Belbey Linkedin.com/in/belbey @Belbey About.me/JoannaBelbey Facebook.com/VMGaxiola Linkedin.com/in/victorgaxiola @VictorGaxiola About.me/VictorGaxiola @belbey @victorgaxiola #BDI1
3 Compliance 10 of 10 8 of 10 Top US Banks Top European Banks About Actiance Key Partners 76% 2 of 3 Global Wealth Managers 60,000+ Finance Professionals on Socialite 5 of 5 Top Canadian Banks Social We are the Market Leader 13M+ Social Network Connections Global Operations North American Financial Services Market
4 @ @belbey @victorgaxiola #BDI1
5 Wikis Public Instant Messaging Public Instant Messaging Industry Networks Industry Networks WebWeb Unified Communication Unified Communication FutureFuture Social NetworksSocial NetworksCollaborationCollaboration Today’s social business can’t use just one collaborative technology to keep its employees connected – it needs to use them all. @belbey @victorgaxiola #BDI1
6 Leads to Several Challenges • Complexity • Adoption • ROI Enablement • Feature Control • Data Leakage • Incoming Threats Security • Regulations • Corporate Policies • Legal Hold Governance @belbey @victorgaxiola #BDI1
7 Compliance Overview For Social Media for Financial Advisors Record keeping Preserve records of written business communications for specific time periods. (If you write it out, it’s “written”.) LinkedIn - Updates, InMail; Twitter - Tweets, Direct Messages; Facebook – Posts, Messages. Regulators only are interested in business communications. Includes Third Party content. Includes personal devices, as content, not source, is determinative Work with third party to capture, archive and make e-discoverable all written communications. Many firms prohibit retweets to avoid appearance of “adoption and entanglement” with resulting recordkeeping and advertising requirements. Regulation Definition Recommendation @belbey @victorgaxiola #BDI1
8 Compliance Overview For Social Media for Financial Advisors Testimonials Testimonials are prohibited for Investment Advisors (IAs) and need to be qualified for Registered Representatives (RRs). Many firms prohibit “Recommendations” and “Skills” on LinkedIn, “Retweets” on Twitter and “Likes” on Facebook to avoid the appearance of an endorsement. Suitability “Know Your Customer”. Recommendations must be suitable for every investor. Most firms prohibit product recommendations and investment strategies unless preapproved by a registered principle of the firm. Regulation Definition Recommendation @belbey @victorgaxiola #BDI1
9 Compliance Overview For Social Media for Financial Advisors Advertising Content standards are the same as other communications. Firms are also responsible for both suitability and recordkeeping of third party content (links, posts). Most firms prohibit retweets, favorites and likes to avoid appearance of “adoption and entanglement”. Static content, such as a LinkedIn Profile that contains more than business card information, is an advertisement and requires pre-approval. Interactive communications do not require pre-approval. LinkedIn, Facebook and Twitter have both. Supervision, recordkeeping apply. Supervision Firms must evidence that they are super vising communications.) Use similar written supervisory procedures already in place. Employ risk- and principle- based principals for review. Limit access to social media unless supervised. Pre-approval of content is required in certain cases. Appropriate training is required. New FINRA Rule 3110(b)(4) includes supervision of internal communications to comply with FINRA and MSRB rules. Regulation Social Network and RecommendationsDefinition Recommendation @belbey @victorgaxiola #BDI1
10 @belbey @victorgaxiola #BDI1
11 • LinkedIn – read only – Listening is key, watching connections who matter – Use to see “money in motion” events • Real results – LinkedIn Connection retirement status change = $2.75m account acquisition – Job Change noticed on Status Update = 401k rollover – FA obtains 400 new prospects in Energy market – New commercial account opportunity through colleague’s LinkedIn connections Case Study: Wealth Management Firm (NJ) @belbey @victorgaxiola #BDI1
12 • Situation – LinkedIn already available to 1200+ – Veteran Advisers, tech savvy – Authentic content • Real results – @MaryS_rwbaird • 51 followers • 93 Tweets (at the time) • $1m prospect, later closed Case Study: RW Baird @belbey @victorgaxiola #BDI1
13 Drive customer loyalty A friend sees an owie, and sends a cure. @belbey @victorgaxiola #BDI1
14 Leverage your connections In a company town, building a network, closes business for you. @belbey @victorgaxiola #BDI1
15 Close new business At a marathon, a supporter, became a client. @belbey @victorgaxiola #BDI1
16 And finally, will Social Media replace the cold call? 200 158
17 • email@example.com • @Actiance • @belbey @victorgaxiola • Further reading: – FINRA 10-06, 11-39 Matrix – FINRA Social Media Handbook – Belbey Blogs: FINRA Spot Checks Call for Social Planning Thanks! Contact Information
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