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Practice Management > Marketing and Communications > Social Media

3 Tips to Avoid Social Media Compliance Problems

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Social media is an integral part of many advisory firms and can help to foster new leads as well as maintain relationships with current clients. Many advisors are establishing their presence on Twitter, LinkedIn and Facebook and reaping the rewards through new business.

Slowly but surely, even the wirehouses are easing the social media restrictions on their brokers. In July, Morgan Stanley started allowing advisors to post their own tweets – following company guidelines, of course, and with pre-approval from their compliance department.  

Every year technology buffs and social media mavens declare one social platform or another to be the wave of the future.

“Social media will be the main engine of discovery, giving us the ability to find the signal within the noise,” Chad Hurley, the co-founder of YouTube once said. “As people’s networks and interactions expand, massive data sets will generate predictive models that will know what you want before you look for it.”

Whether advisors and their firms use LinkedIn, Twitter or whatever hot social media platform comes next, here are a three tips to keep shared content compliant with company policies. 

More Employees Should Equal More Automation

More Employees Should Equal More Automation

Social media management should grow as the advisory or brokerage firm grows. When a firm adds advisors, it gets increasingly difficult to manage all of the passwords, spreadsheets and aggregators of content for the different accounts.

“As you get more activity, the program begins to get slow or loose,” said Devin Redmond, CEO of Nexgate, at the Social Media and Compliance and Financial Services forum in New York on Thursday. “You’re eventually going to have hundreds of people updating the publishing platform.”

Nexgate is a social media firm that helps companies filter tweets, posts and other shared information that doesn’t fit with a company’s compliance polices.

Streamlining information makes it easier for advisors to gain access to content, and the company is able to better control what information is being put out.

Take Violations Seriously, and Police Mobile Devices

Take Violations Seriously, and Police Mobile Devices

It can be time-consuming and difficult to look at everything each employee is doing on any device, especially a mobile one. When an advisor uses a mobile or non-company approved device, it opens up a window for compliance issues because the content cannot be monitored closely. “It’s very difficult, but not impossible to have a technology solution to prevent and advisor or agent type of community from using their iPhone,” said Mitchell Bompey, Managing Director at Morgan Stanley, at the forum.

“You need to have a policing type of technology with meaningful results. You should also set certain demerits for violations,” Bompey continued. Employers should make sure that compliance and policy violations are taken very seriously.

“If it’s going through mobile, it [the information] might have not gone through your workflows and checks,” said Redmond.  

Be Aware of New Threats

Be Aware of New Threats

Cybersecurity threats like inbound or outbound spam and phishing are a big issue. Some companies see that they are most inclined to get attacks that “come from their social footprint,” Redmond said. “It’s more wide open. The bad guys will go where there’s the least resistance and the highest ROI; that’s just the nature of how securities work.”

These threats are more than annoying. “Every time these things happen, that’s a compliance issue,” Redmond said, adding that a cybersecurity attack can  turn into data theft. Thinking about the cybersecurity risks of social is just as important as making sure advisors are compliant, Redmond said.

One threat advisors should be aware of is “sleeper” accounts used by spammers, which sit inactive until the spammer chooses to “wake” them up (often after getting banned for spamming or to gain more attention at a particular time). An “increasingly common” tactic is using a company brand to attract customers for other purposes. “They create a persona to show that they’re associated with your brand and then actually sell something else,” Redmond said.

The bottom line, Redmond and Bompey advised, is that these threats will never be stopped, but this is the environment we live in, and advisors must be proactive.

Check out 3 Key Steps to Jump-Start Your Business Using Social Media on ThinkAdvisor.



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