On Social Media, Cut Through the Compliance Clutter and Connect

Ambiguity is still a concern, he said. It feels like social media has been around for a long time, but some laws and regulations have been around for decades, if not centuries, he said. “It shows how long it takes these bodies to adopt and figure out how to apply mandates to this new channel.”

One difficulty for firms in regulated industries is that social media isn’t just one channel, Hayes said, which requires firms to sometimes “set particular guidelines in all these different places.”

He highlighted five distinct categories for social media compliance:

• Data protection and privacy. A Forrester survey found 92% of consumers “take issue” with companies accessing the public part of their social media profiles. Hayes noted that doesn’t necessarily mean they’re against it entirely, but they’re “uneasy” about how that information is being used.
• Employee rights. Hayes described one organization’s struggle with an employee who left the firm, taking the 17,000 or so followers he had built up while he managed the corporate Twitter channel.
• Disclosure and third-party endorsement. Sometimes, firms need to be careful about how other users interact with their brand online. For example, Hayes said, if a third party suggests a use for a firm’s product that hasn’t been approved by the Food and Drug Administration, and the firm doesn’t address the unintended use, “the longer you leave it there, the more likely it is that you are condoning that comment as accurate.”
• Governance and oversight. Process and controls, and training for the people using social media, are important parts of a social media policy.
• Archiving and retention. “How are you going to provide context to the dialogue that comes up?” Hayes asked.

Hayes offered some recommendations to help firms meet those challenges.

First, he said, the internal and external social media environment at the firm needs to be monitored constantly. “This is really important because there are so many different ways it’s being used. You need to start thinking about what your organization is using, how your workers are using it, where you need to apply the policy, and doing so on an ongoing basis because it’s something that’s continually changing.”

Of course, firms also need a clear understanding of what their obligations are regarding their specific industry, “not just what they are today, but how they’re going to evolve in the near future,” Hayes said. He predicted that although there haven’t been cases with huge fines for noncompliance with social media regulations, that won’t be the case for long. “There are going to be examples of more heavily penalized organizations for not updating their policies, for having inconsistent approaches to how they manage social media.

Finally, Hayes urged advisors not to lose sight of why they’re using social media in the first place — to connect with their clients. “At the end of the day, social media is going to help you create better, deeper relationships,” he said.

John Hair, director of risk consulting at KPMG, an audit, tax and advisory firm, said that firms aren’t trying to demonstrate their social media compliance to their customers. “The marketplace doesn’t really care that much,” he said. On a day-to-day basis, they’re not really demonstrating their compliance to regulators either because “the last thing we want to do is have the regulators come in talking to us about our compliance programs if we fail.”

The real target audience for a firm’s social media compliance strategy are the executives who are setting the budget for social media. “That space where the executive suite and our social teams meet is where we believe governance lives,” he said.

Everything on social media is discoverable in the event of a lawsuit, he said, so it’s important that firms not post anything that could damage the industry’s viewpoint of the firm.

“Compliance is not just there to spoil the fun,” he said. “Compliance frameworks really drive an industry to run as efficiently and effectively as it can while protecting the customers it serves.”

—Check out Hearsay Social Wants to Help Advisors Predict Client Behavior on ThinkAdvisor.