LPL Financial has joined the social networking crowd. On Wednesday, business tech company Erado announced a multi-year contract with the company, the country's largest independent broker-dealer, to provide social media compliance services.
LPL has joined the list of independent broker-dealers who are embracing, albeit with controls, social media for its reps. Commonwealth Financial announced in April that in early June its advisors would be able to tweet and otherwise make their presence known on popular websites Facebook and LinkedIn. Now LPL has jumped on the bandwagon, and Erado says more are to come.
According to Craig Brauff, CEO of Erado, LPL had a number of reasons for choosing the company. In a statement, he said, “The first reason is that our solution integrates with their existing surveillance infrastructure. The benefit is streamlined surveillance by utilizing the existing reporting tools that LPL Financial compliance is already using. This significantly reduces management costs associated with social media. Second, it's not proxy based. As a broker-dealer or organization with thousands of advisers, managing the multitude of social media capable devices becomes virtually impossible and extremely expensive.
"This dramatically increases the risk associated with social media content capture, and allows a broker-dealer to defend social media policy,” he said.
LPL Financial sees the arrangement as part of a broader strategy. "Our partnership with Erado is an effective way of meeting rising demand from advisors for social media compliance services," said Joseph Kuo, a spokesperson for LPL. “At the same time, this fits within our broader strategy of seamlessly bringing together leading solutions that are reliable, simple to operate and fully integrated on our proprietary technology platform.”