Erado, which provides social media compliance and archiving software for broker/dealers, plans to expand its operations into Western Europe, Canada and possibly Japan next year, and expects to add at least 30 new employees in 2012. Craig Brauff, CEO of Erado, said the company is expanding because of the growth they’ve seen and the explosion of social media within the financial services industry.
Since launching its social media software in May 2011, Erado has added 26 broker/dealer clients, including LPL Financial, Commonwealth Financial and National Planning Holdings, and is capturing social media activity for 40,000 financial advisors. Another 120 b/d clients are currently in the process of signing on, Brauff said. He expects to make an announcement in January.
With Erado’s technology, b/ds are able to monitor, track and archive FAs’ social media activity, in compliance with FINRA’s social media rules. In early 2010, FINRA issued social media guidance that said all b/d member firms should have a system in place for tracking and archiving social media communications. The agency still requires that firms pre-approve content that is static in nature. And just recently, FINRA issued Regulatory Notice 11-39, which further clarifies FINRA’s rules on social media and more clearly defines “static” versus “interactive” content. Last week, the Investment Industry Regulatory Organization of Canada issued guidance updating its guidance on social media use.
There’s no doubt social media use has become more prevalent in the broker/dealer world, growing considerably in the last year. According to a Registered Rep. survey of 1,597 advisors, 51 percent are using social media for business purposes.
“I believe social media is ingrained in our DNA, and will be part of the future of communication,” Brauff said.