Got the Social Media Spins? Help Is On The Way

Got the Social Media Spins? Help Is On The Way

A bunch of social media services have emerged to help financial services firms comply with regulations and make the most of social networks to build business. They've got big plans for 2012.

The time to ask whether a firm should launch a social media campaign has long since passed. Clients are tweeting. So too are reps. A better question is what is the right way for advisors to use social media — a subject that can cause confusion even among firms that believe they're following all the rules.

“Some are trying to do it by themselves,” says Deena Katz, associate professor at Texas Tech University and chairman of the wealth management firm Evensky & Katz in Coral Gables, Fla. “They're not getting any help and think they're doing OK. Then it comes back to bite them.”

As use grows, regulators are watching more closely too. Witness the SEC's recent fraud charges against Anthony Fields of Lyons, Ill., who allegedly tried to sell more than $500 billion in bogus securities on multiple social media sites. The regulator has also reviewed the social media policies of investment advisers and reported that it found a lot of confusing overlap with other compliance policies and not enough specifics on social media do's and don'ts.

To stay on regulators' good side is paramount. But of course, the guidelines available still leave a lot to the imagination. What is clear is that financial services firms that want to allow their financial advisors to use social media must monitor and archive their tweets, posts and direct messages — and many are already doing so with new technology that emerged in 2011. The SEC has also advised them if clients recommend their advisors on LinkedIn or ‘like’ their pages on Facebook, it could violate advertising rules. But some large questions have been left open. Exactly what kind of content is even allowed? What kind of content needs to be approved before it's posted? How often should firms monitor postings after they've gone up? In some cases, FINRA wants firms to apply a smell test to determine how to monittor social media use.

“We don't want to get too granular because we want to maintain the flexibility, so as new technologies emerge, [guidelines] can be flexibly applied,” says FINRA's Joseph Price, senior vice president for corporate financing and advertising regulation for the agency. With regards to what kind of content needs to be approved when, he says, “We understand the principle — that it's impossible to preview all interactive content. And what's possible and what's impossible should help inform what type of content should be pre-approved and post-approved.”

So what's a firm to do? Luckily, there are several options to help firms follow social media compliance guidelines. You don't need any messy software installation to use them. Instead, these are services available through the web that monitor and capture social media data, and often do much more.

We took a look at six solutions on the market today and what's on their table for the coming year.


Think LinkedIn offers the best connections to clients? That's what Sarah Carter, Actiance's vice president of marketing, thought too — until she ran her firm's program through her own feeds. “I reach more people through Twitter,” she says. “[Twitter followers] are reading more of the content and clicking on my links.”

The ability to dive deep into her own network data allowed Carter to understand better how she reaches contacts — and Actiance's Socialite, launched in July 2010, supports that detailed look for all its clients. Users can sift through posts, find what time of day is best for a rep or team to comment, and even glean which updates went unnoticed. Carter says that a recent customer identified how a LinkedIn connection turned into a $2 million retirement account.

The service also allows broker/dealers, like Raymond James to set up a pre-approved content library for reps who don't want to author their own tweets. Alternatively, reps can tackle their own updates, which are then reviewed through a lexicon library. What the San Francisco-based Actiance doesn't do is store data for clients. Instead it pushes records to a firm's content management platform, usually on a 24-hour basis. That's done for Twitter, LinkedIn and Facebook data — and also YouTube, which the company began supporting just before the end of 2011. Plus in 2012, Android user clients will be able to run much of the program through their mobile devices.


Like Actiance, Socialware can measure a rep's overall reach in social media — or the effect of a single post. That can help reps know what kinds of tweets are most powerful — or what topics to potentially avoid, says Christie Campbell, the Austin, Tex.-based firm's director of marketing.

Socialware is set up as a proxy system so posts can be blocked when reps log on to their social networks through their office computer or an employer-owned mobile device. But when at home, or on a personal device, their posts are instead captured, and the compliance team alerted to check them later. The service also allows for the creation of a library of pre-approved content, which can then be posted, and for post-approval of flagged content.

Working exclusively with financial services companies, Socialware stays abreast of regulatory guidelines and requirements, and even shares the findings of its annual survey with regulators. The company takes compliance seriously, meeting quarterly with its clients to talk about regulations as well as how to tie social media into marketing needs.


Erado is not interested in building content libraries for reps. “We're partnering with companies that do that,” says founder and CEO Craig Brauff.

Instead, Erado captures data and sends it directly to customers. It's a service the Renton, Wash.-based firm has had in place since 1995 when it launched an e-mail archiving product — and Brauff says the process works. Support for social media networks, including LinkedIn, Twitter, Facebook, YouTube and some of Google+, started in mid-April and Erado went from zero to 40,000 accounts by the end of 2011, including reps at firms such as LPL Financial and Commonwealth Financial Network.

Analytics, however, is something Brauff acknowledges reps and firms do want — and more of it. So Erado will be offering a more detailed way to read usage data in the first quarter of 2012.

Hearsay Social

The idea that the customer is always right is one Hearsay Social takes seriously. The San Francisco-based firm offers many of the same things offered elsewhere, but allows clients to customize, picking services a la carte. At the baseline, Hearsay captures and maintains posts for all three of the main social networks plus YouTube and Google+. Clients can also opt for content libraries, and get support from any device or interface. They can capture advisor updates for post-approval. And Hearsay can either retain the data it captures or push it out to a client's system.

But which service do Hearsay's clients request the most? A granular understanding of how their social media use is impacting their business. Clients have even asked to see hour-by-hour data on the effectiveness of their content, says Steve Garrity, the firm's chief technology officer and co-founder.


For Portland, Ore.-based Smarsh, record-keeping is still No. 1. The company hosts its own data centers — even refusing to use rented equipment so that storage devices can never disappear, says CEO and founder Stephen Marsh, who launched the firm in 2001.

Marsh says the company also provides downloads of a firm's data, which can be sent through encrypted e-mail every two months — even if Smarsh goes out of business. And it can send the data directly to the SEC or FINRA if a client needs that as well.

Still, Marsh says Smarsh doesn't neglect the increasing interest in marketing support through their social media solution. Broker/dealers can be assured that posts are caught based on target words in real time. And clients can set up a pre-approved library of posts for reps to use in LinkedIn, Facebook and Twitter, along with Salesforce Chatter, Jive and Yemmer.

For 2012, Marsh wants to offer a more centralized way to publish to networks, allowing reps to push content to all sites with just one click. He also hopes to expand Smarsh's analytics beyond its current ability to see how often content has been viewed. “There's definitely a big opportunity and we're not going to let it go by and watch it unfold,” says Marsh.


At SunGard, analytics are already on the front burner, says Suman Garhwal, vice president of business integration at SunGard's global trading business, which includes SunGard's Protegent social media solution. In early 2012, reps will be able to see which posts had the highest response, while firms will be able to see which advisors are the most active on social media. Firms will also identify reps who are still not on social media, so they can push training programs their way.

An API-based solution, Protegent works from the back-end, meaning the product can capture content posted to LinkedIn, Twitter and Facebook from any device whether a desktop at the office or an iPad from a hotel pool. The company stores data for clients, but also can export and send content to their archiving systems, which Garhwal says most clients prefer. Reps can submit content through Protegent for pre-approval, select which networks the post will appear on, and even set a publish date. Then compliance can approve and push that update at a specific time, to all or any of the social networks at once.

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