Social Media Regulations for the Financial Industry (finally)
Last week FINRA issued Regulatory Notice 10-06 to finally address how those it regulates can participate in social media. Anyone regulated by FINRA already knows this, and I’ve got nothing new to say about the notice.
I do have some questions about linkedFA, a new service that purports to comply with FINRA’s guidelines. This part of the standard seems to be the most onerous for services like LinkedIn, Facebook and the rest to comply with:
Every firm that intends to communicate, or permit its associated persons to communicate, through social media sites must first ensure that it can retain records of those communications as required by Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934 and NASD Rule 3110. SEC and FINRA rules require that for record retention purposes, the content of the communication is determinative and a broker-dealer must retain those electronic communications that relate to its “business as such.”
The linkedFA site allows advisers to create three separate profiles to interact and display different information to clients, peers and recruiters. By capturing and storing communications for six years, founder Brian Byrne says everything is “extractable and reportable.”
Ho hum, where’s the value proposition?
I’m not willing to join a network of CPAs just so I can see what mine has to say about the profession, so why would the general public join linkedFA just for the privilege of communicating with their financial advisor? Social media depends on the network effect. Unless linkedFA intends to collaborate with the entrenched networks like Facebook, LinkedIn, Twitter et al through some sort of API I don’t know how it would expect to gain traction with the general population.
Since I’m not a developer or social media genius I asked my friend Andy Ciordia (who is both) to weigh in.
I think it must be recognized that we have mature social media platforms out there. The real question is what is being done to leverage their power to create further value in something like linkedFA.
There are plenty of social networking platforms out there for professionals. Most of them at the very least allow you to bring in your content from other social streams. Sadly many of them lacking real programming budgets do not allow the same beyond an RSS feed to others. That’s not real interactivity.
So what is l`inkedFA really adding? Looking at the wrapping around the site and watching their video I feel shaky at best that it’s going to be something that blows the doors off of using LinkedIn. Tamela and I had a great phone conversation on this and we both agreed that this type of service would be fantastic to siphon from all the streams and have it act as the archive, the record, the authority. However to build just another networking site and then have to have everyone make new accounts (I didn’t see OAuth or another federated solution to make life easier), seems like a lot of work just to help communication along. I communicate fine over the phone and email with those financial services in my life. Why would I hurdle barriers to entry and a dubious data portability to go see them over there?
API or not this style of service is going to have an uphill battle and they’re going to have to separate themselves from the pack through some logical yet ingeniously implemented ideas. More than not I could see LinkedIn move their resources around and allow for FINRA compliance.
How about it, advisors, what has the FINRA notice done for you?
Is your firm promising a new policy for social media interactions?
How many of you are participating in social media behind an avatar and pseudonym?
End of Email?
Interesting article in WSJ about email’s younger, prettier communication sister: social media.
For those not using Twitter, Facebook and other means of connecting with the outside world, this WSJ quote explains the difference between them and ye olde email: “We all still use email, of course. But email was better suited to the way we used to use the Internet—logging off and on, checking our messages in bursts. Now, we are always connected, whether we are sitting at a desk or on a mobile phone. The always-on connection, in turn, has created a host of new ways to communicate that are much faster than email, and more fun.”
The story quoted Alex Bochannek, curator at the Computer History Museum in Mountain View, CA: “The whole idea of this email service isn’t really quite as significant anymore when you can have many, many different types of messages and files and when you have this all on the same type of networks.”
What’s this bode for email newsletters?
The article doesn’t make my point explicitly, but sets it up well. Email newsletters and all THOUGHTFUL communications have a place OUTSIDE social media. Said another way, to communicate thoroughly, thoughtfully and confidentially, if you can’t meet in person, start with email.
This mirrors my own experience, as a fairly active Twitter(er) who averages 30 daily updates. For those of you not yet using Twitter, don’t take the impression that I have that much to say about myself — my tweets are usually in response to news items posted by other users or part of a conversation with my “followers” (feels a bit Jim Jones-ish calling them that, but oh well…that’s what they’re officially called).
Sure, I occasionally tweet out the odd “gonna clear my head by taking the dog for a walk” message, but the fun thing about social media is how people find you on the basis of these throwaway tweets. I now have a number of followers who send me pet food coupons and even Cesar Millan aka The Dog Whisperer follows me!
Belt & suspenders approach
Back to the topic at hand. For THOUGHTFUL, well-written communications, there is no substitute for email. The only thing that comes close is what you syndicate through your RSS feed. However, people get busy and forget to check their readers. An occasional email poke to check the RSS feed will probably always be in order.
Here’s my belt & suspenders approach to being heard:
- My website is home base. It’s the hub of external communications
- Primary communications spokes
- Blog and its RSS feed
- Newsletter
- Email
- When I post to my blog ( my website is actually a blogsite), it automatically sends a tweet with the title and a link for all the world to see. It also sends out an excerpt of the post through my RSS feed for those who’ve subscribed and to those directories like Alltop, that carry my content. Those who are linked to me via LinkedIn can see this excerpt on my profile page. Anywhere that anyone sees an excerpt of my blog posts, they can click to read the whole thing on my blog.
- I use Twitter to entice the Twitterverse to read my blog posts. With 140 characters per tweet, I use the url shortening service bitly to get the links down to 16 characters, then use what’s left to tease with leads like “Why Email Isn’t Dead.”
- I also use Twitter to ask specific people to read or comment on posts, according to their inclination and expertise. I know who wants to read my posts about SPAM and who wants a financial blog writing prompt and who’s the best expert to comment on one of my posts. If I’m fortunate, some of my followers will “reTweet” what I’ve sent so their network of followers will have the opportunity to read something they would not have otherwise known existed.
- When I get comments on the blog I Tweet that out to keep the conversation going. This helps those who’ve commented get their ideas in front of a wider audience, too. The least I can do.
- My newsletter promises three things every month: something on whole-brain communications, a bit on brevity and updates on topics related to email marketing and newsletters. Eventually everything from the newsletter shows up in the blog. For those who don’t want to read every blog post or remind themselves to check my RSS feed in a reader, they can read my monthly newsletter and click through to anything else that might interest them in the blog. The newsletter is an efficient portal to all the information I offer.
- I reserve email for my most formal and private correspondence. It’s also how I communicate with those not on social media. As the WSJ article says, some things require attachments and confidentiality and email is the next-best thing to a tête-à-tête
OK, that’s my communications methodology. What am I missing that works for you? Do tell (if you comment, I’ll tweet it out)!
Advice for those who need a ghostwriter
As a writer with some tech savvy and a general tendency to extroversion, social media works very well for me and and I’ve found a way to bind all my efforts together strategically. My experience is that those who invest the time in social media will benefit, but not everyone will want to make that investment. Fine.
If you’re a professional of any stripe, start with a custom newsletter written by yourself or a ghostwriter — not something you stick your logo on and call “customized.” No idea what to write? I offer news-driven writing prompts, if that helps.
Keep a consistent publishing schedule and maintain a searchable repository of your articles (not just prior newsletter editions, the individual articles) on your website. One of my clients does this so that we can eventually compile his newsletter articles into feature articles for professional journals. Another client’s newsletter articles go into his blog and will eventually become a book. Re-purpose your material.
My observation is that people are often reluctant to start small when they have big aspirations, but every desert is composed of tiny grains of sand. They add up.
ADDED 10-19-09
Further evidence of the power of Twitter: this morning one one of my tweeps, @derekhernquist, brought this video to my attention:
When to Facebook, What to Facebook
(Note from Tamela) When I spoke to the Carolina Professional Saleswomen & Entrepreneurs in June, I promised a follow-up on their questions about Facebook. I turned to my good friend and social media genius, Andy Ciordia, who built and maintains my wonderful blogsite, for a guest column on the subject.
Andy Ciordia speaks
Facebook, Facebook, Facebook.. Unless you’re under a rock someone has talked about it and usually I hear this:
“An old highschool friend [who I may or may not desire to find me] has found me on facebook. I’ve connected with everyone I used to know.”
along side,
“I am losing at least a few hours a day just flipping through Facebook. I can’t believe how easy it is to just get lost in.”
Do I need Facebook?
With every new technology there are those who are already there, those who are in transition, and those who are defiant to it. Unfortunately time is not on your side, the new usually always beats out the old and even the most stoic convert eventually. Remember cell phones?
But do you need Facebook? No, of course not. It’s an application, a medium of communication. You’ll never find yourself in a desert and think, “If only I had Facebook”, haha! However, as a medium it courses with information. Information that can allow us to grow, to understand, and at times get lost in. Like any technology there can be abuse, but that’s not the question at hand.
While you may not desire Facebook and the level of transparency you can gate a large percentage of that through their options. In the budding age of social networks I recommend people getting online, checking out the tools, and share only what is comfortable to them and lock out the rest until they find a purpose to it. At the core of the thought is that you should be aware of what is going on in the internet space and this is where a lot of growth is coming from. If you miss this age you might be even further out when the next layers come down.
What does Facebook mean to business?
A good question and one central to anyone in modern business. You used to be able to not be online. Remember that? Oh I don’t need a website. My how times have changed. If you are not online you can hear a collective consumer sigh as they switch gears and Google your competition. Now we’re entering the social media age, which was really there all along but it’s never been so easy to tap into. Before this was mainly limited to the relationships fostered by brick and mortar establishments. Now the power of the individual business through social networking can establish healthy relationships with people from around the world!
While social media is undoubtedly something you will want to integrate into your marketing portfolio the uses of it and Facebook is a bit more unclear. Some markets it is required for, national brands, local outposts, grass root campaigns, and many others. However it’s not always critical to the success of you or your brand.
Facebook works best for the personal or group mentalities. After watching many come to Facebook with the expectation of huge sales and followers only to be hit on the head after hard sales approach many can walk away dejected due to the misunderstanding of the media. Facebook requires you to culture more of who you are, show it, relate with others, while developing and fostering relationships.
Social media takes time
These medias which unite us together and create a stronger representation of self, what you stand for, and your business are fantastic but it comes at a cost. Your time.
In the old sales channels how often were you out beating the street and meeting others. Knocking on doors, or picking up the handset? Quite frequently if you want to keep your business up. A relationship is a relationship. You’re still going to have to build and maintain it. What happens differently in this medium is there are elements of entertainment. Well we are really good at being entertained and all of a sudden your day is done but how many new people did you meet, how many people did you really interact with, and did any of your goals from the onset get met? You have to be careful.
One step at a time
I challenge you to get involved by taking small steps. Like Tamela often asks me, ‘Which part of the elephant are we eating today?’ The domain of all of this knowledge is large, the nuances subtle, but the payoffs can be large for you personally or for your business. Enter the arena slowly, watchfully, and aware of what you are exposing. Be honest and share what you can with who you want and evolve the relationships naturally.
Andy Ciordia works for Nuance Labs Consulting helping small businesses to establish their brands, identities, and strategies online with a hands-on personal approach. You can find Andy on LinkedIn and Twitter helping others in the community. Feel free to reach out and connect with Andy for the beginning of a great relationship.
