Posted by Brittany Lett on Mon, Feb 20 2012

All Posts by Brittany Lett

Social media and regulation – Can they play nice?

Securities Technology Monitor LogoThere has been a large resistance to social media in the financial services industry due to tight regulation on anyone who can potentially influence the market.  Whether it is FINRA or the SEC, regulators have helped keep the lid on social media activity by equity analysts, RIA’s and other wealth management and advisory professionals.

Over the past few years, compliance departments have been one of the biggest obstacles keeping financial services companies out of social media. They didn’t want to create new policies or figure out a way to incorporate social media because they felt it was irrelevant and too risky for individuals to take part in. You never know what they could say. Social media channels were seen as uncontrollable and untrackable - inherently risky.

This notion has quickly been changing. Today, we are beginning to see compliance departments embrace social media and figure out ways to help reduce barriers to the two-way instantaneous communication that social media channels require.

A recent article by Tom Steinert-Threlkeld in Securities Technology Monitor highlights how Raymond James Financial has implemented social media compliance tools that will help its 4,000+ advisors use social media channels more effectively.

Key takeaways from this article are:

  • Raymond James has installed two systems from social media software firm, Actiance.
  • An advisor creates a post, enters it in the system and then submits the post to compliance via Actiance software.
  • One of Raymond James’ 220 compliance specialists will review the post and approve or deny it.
  • The company has created an editorial calendar as well, which will help advisors create content in advance, which will be scheduled for distribution according to the advisor’s liking.
  • The end goal: “To make social communication more social. And help establish connections between advisors and their clients.”

Overall, this is a great step for the advisory community. There is so much that can be done by investment professionals on social media channels – from tweeting personal views about the industry, to tweeting about events, and posting thoughts on industry blogs.

When we’re advising clients on social media, we find that engaging compliance departments early is the best way to go. Work with compliance teams and see what the firm’s policy is for public communication and social media. Some firms may have existing social media policies while other may have general communications policies that can be adapted to social media.

Complying with regulation is critical to all of us in this industry. It’s great to see that compliance departments are beginning to use new and creative ways that enable team members to comply while also embracing new communication channels like social media.

CNBC, Compliance, Financial Times, FINRA, Regulation, Social Media,
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