What RIA's/FA's Need to Know About Archival Companies/Software

Archiving Software--Is it an Expense Item or Revenue Generator?

FINRA in the US and IIROC in Canada have established regulations which call for financial service firms to archive or record-keep their social media activities. These new social media regulations are in line with previous regulations requiring copies of all correspondence with clients, advertisements, sales literature, public appearances, etc. Now the rules are pretty much the same but the medium has changed. In the case of email, the archival process is automatic and saved on firm’s servers or your own hard drive. However, the need for to archive other items including LinkedIn, Twitter and Facebook activity has created the need for a new breed of software: archival.

To be FINRA compliant, firms and/or individuals must engage an archival company to record, and be able to retrieve social media comments, posts, tweets, etc. FINRA compliance is serious business. They have been levying some substantial fines in recent years. To make matters worse, the archival software industry is still very young and evolving. Even the “most senior” firms are 3- 4 years old at the maximum. And further complicating this important issue, there are approximately 140 companies trying to establish themselves in this new market. So, what is an advisor to do? They must choose from among these somewhat fledgling firms who are developing and evolving their own technology and best practices at real-time alongside their clients.

Archival firms, like other industries, may have difficulty communicating their own differentiators especially since they are continually evolving. This may lead some advisors to the conclusion that the least expensive choice will fulfill the archival requirement imposed by FINRA. Nothing could be further from the truth! Advisors must spend some time learning the in’s and out’s of archiving software and not simply perceive them as an expense item or necessary evil to accommodate FINRA. Smart advisors are learning that archiving posts, tweets and comments can be analyzed and used to generate revenue and expand your individuals and firm’s social media presence instead of simply keeping records.

For example, the act of archiving both your own social media content and that of your competitors can create some interesting data points to analyze. Most archival firms have robust reporting which you can view and report on keywords which your firm or others repeat to learn what they are talking about via social media. This type of intelligence gathering can be quite effective either at the enterprise level or hyper-local level. While some RIA’s and FA’s focus on the minimum cost archiving solutions to assure FINRA, the truth is that there are huge differences in the output and reporting provided by archival vendors. Furthermore, those firms with an easy to use “dashboard” for analyzing and engaging will be winners as well. While FINRA wants compliance, RIA’s and FA’s should be thinking about engagement and conversion of potential referral sources and future clients.

To help you understand some of the thought-leadership and differentiation in this market, I spoke to a short list of three leading vendors. According to Chad Bockius, CEO of Socialware, “Solving the risk side of this equation allows you (advisors) to unlock the revenue side.” Chad went on to say, “Think of your social media compliance solution not as just for archiving but as a new marketing and communications channel.” I agree with that position. Firms and advisors will be short-sighted if they think in terms of expense only when selecting archiving software. Actiance, another significant player in this new field has a slightly different view. They stress the compliance aspect. According to Sarah Carter, Actiance’s VP of Marketing, “Archiving is the car insurance policy and home insurance of the software world. It’s a necessary cost item. “She says, “All of us will have a social media or information crisis in the future and I’d certainly want a copy of my records if that happened.”

Engage 121 positions themselves altogether differently. While acknowledging that they are a social media compliance solution, they see themselves as having the ability to help businesses solve other type’s problems beyond social media compliance. RichLoPresti , Account Director at Engage 121, says that, “Smart advisors are learning that monitoring and archiving posts, tweets and comments can be used to gain information on your targets and know more of their ’back story.’ This is what drives engagement.” He says that studying a client’s online life patterns can help you connect with future clients. A former advisor himself, he recommends using this information to create new touchpoints and engagement via social media.

Whichever archiving solution you choose, I suggest that advisors do their own due diligence on these firms and select the one that is the right fit for them. Choosing the lowest price solution may be your firm’s most costly mistake in the competing with other advisors and having the ability to showcase your own thought leadership.

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