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FINRA is Official Social Media Guide for Financial Advisors

October 21, 2011 By

As content writer for professional service and financial service organizations, I find that all my customer segments are not playing on a level playing field in regard to social media. Specifically, I’m talking about financial advisors, financial planners, broker-dealers – those people licensed to help other people with planning their financial futures and investing appropriately.

Like others that have to be adept at personal marketing and selling, financial service professionals have discovered the benefits of social media and online marketing. Unlike most of us though, financial professionals have a pretty heavy regulatory burden. Mind you, I’m all for protecting consumers from the unscrupulous advisors, but I can empathize with financial service professionals and their bafflement with their oversight.

They answer to Financial Industry Regulatory Authority (FINRA). FINRA is the largest independent regulator for all securities firms doing business in the United States.

The question then is, “How does a registered representative leverage social media and stay in compliance?”

The answer is a bit convoluted. The easiest way to manage the “stay in compliance” part is not the play the game. In other words, omit social media from your marketing mix, even though it’s fast becoming an expectation by many consumers. Consumers expect to interact with people and organizations regarding most every aspect of the consuming lives: cars, restaurants, hotel destinations, and yes, financial services and products.

Follow the FINRA bible of social media

Step #1 to using social media while staying in compliance is to read (and print out) the “Guide to the Web for Registered Representatives.”  It is the official rulebook, however, it can be vague at times, and it’s periodically updated and/or interpreted by FINRA and other regulatory bodies. Watch for the updates, too, of course. Google Alerts is a handy and free tool for getting updates when certain keywords, or topics, are mentioned in cyberspace.

Step #2 is to learn how respected organizations and people interpret the guidelines, and to keep track of how FINRA rules on those people and organizations that are using social media that are out of the ordinary, or not specifically covered by FINRA. Social media is so new and so different that we’re going to see changes in the guidelines evolve on a continual basis.

Nuts and bolts of FINRA social media guidelines

A number of organizations are closely following and summarizing the latest information coming from FINRA. Since they do a nice job of providing the “nuts and bolts” of social media compliance for the financial services industry, I will not try to duplicate their efforts. Instead, I will mention a few that I found very helpful.

  • FINRA. Always start with FINRA, and state/local regulatory bodies. They are the ultimate source of how financial services professionals can use social media.
  • Socialware. Socialware is headquartered in Austin, Texas. The company (in their own words) “operates a social middleware platform that enables enterprises to transform public social networking Websites, such as Facebook, LinkedIn, and Twitter into enterprise-grade channels for communication and collaboration.” They also are closely following trends in social media for the financial services industry and share their insights in the Socialware blog/website.
  • HearSaySocial. Hearsay Social offers a software-as-a-service (SaaS) social media management platform that acts as a layer on top of Facebook, Twitter, LinkedIn and other social media. The company says it offers the only social media management solution that comprehensively addresses content, compliance, and analytics for corporate-to-local companies. The Hearsay blog and Ally Basak Russell, of Hearsay, are good sources of information about FINRA and social media use in marketing financial services.

If you know of other sources of good information, please let me know! Good luck with leveraging social media in your business.

Filed Under: Financial, News, Online Marketing

LinkedIn a Safer Investment than Facebook?

January 28, 2011 By

Facebook has been abuzz lately with its likely public offering of stock. I wonder if LinkedIn might be a safer investment? The New York Times (1/28/2011) says that LinkedIn, the social network for professionals, filed a prospectus for an initial public offering on 1/27/2011, and that private shares of LinkedIn recently traded at an implied valuation of $2.51 billion on private exchanges. (Don’t know if there is a date for the actual offering yet.)

For comparison, the New York Times reported earlier this month that Facebook “has raised $500 million from Goldman Sachs and a Russian investor in a transaction that values the company at $50 billion.” Fifty billion, are you kidding me? Of course, I said something similar just before Google went public a few years ago.

People can crunch the numbers and talk about the number of users, dollars earned per user, share of market, etc. Those things are important, of course, for those seriously sinking some money in the market. In this post I’m just making a personal opinion based on my personal use of both social media tools. Facebook is really robust and fun, but it really scares me to death in regard to security and privacy. I don’t trust Mr. Zuckerberg all that much, and the movie about him lends to that concern.

I enjoy keeping up with friends, family and business acquaintances with Facebook. It does not, however, seem all that safe to me. Every day I question my use of it. The privacy rules seem to change regularly and changes to the tool seem to be devised more to raise revenue than to thrill the users. Security issues have popped up lately – Zuckerberg’s own account was hacked a few days ago. A serious misstep or calamity could really hurt Facebook.

LinkedIn isn’t perfect either, I know. Maybe some of the same issues exist there, too. However, I do find it to be quite valuable as a business networking and learning tool. I like that it’s focused on business professionals only. Facebook, unless you have consumer product, just doesn’t seem to be very beneficial for B2B. LinkedIn has brought me some new contacts and business opportunities, and I feel reasonably safe in using it. The groups have some really good discussions and give one opportunities to soft sell their expertise. So, I’d go with what has been good to me.

So, if I had some “walkin’ around” money to invest, and the choices were Facebook and LinkedIn, I think LinkedIn might be the safer investment. Most of all, I hope that all these rumored public offerings for these and other social media companies don’t go the same way as the tech bubble (aka dot-com bubble) that occurred at the turn of the century.

What do you think? LinkedIn? Facebook? Some other social media company? It’s all too risky? Bet the farm?

Filed Under: Financial, News, Social Media

Slogging Away in Kansas City

January 18, 2011 By

The economists, financial gurus and prognosticators have pretty much all made their predictions for the national and global economies in 2011. One that seems rather accurate to me is that we are in a long, hard slog and have been since 2000. William Greiner, CIO for Scout Investment Advisors, asserts that the USA has been in long-term bear stock market since the year 2000 – that’s eleven years running! Yes, we’ve had a nice market run-up since the declines of a couple years ago, but tell me, is your retirement account significantly higher than 2000? Most of us would say, “No.”

More importantly, what do they experts predict? When will a recovery really take hold? I cannot get too excited about reports that we’re not losing jobs at the same pace as in previous quarters. I’m looking for something a lot more positive. Like friends and neighbors getting jobs, raises and not feeling too scared to take a risk, on say, buying a new car or home. Greiner, Bill Gross of PIMCO and others seem to think eventually there will be capitulation. Capitulation is the act of surrendering or giving up, and people and organizations decide to tackle the real problem. The real problem is an unsustainable debt level in the US and several western countries.

While I’m rooting for our government to get us out of this mess, I don’t know that continued fiscal stimulus (i.e., spending money we don’t have) and keeping interest rates at extremely low levels is getting us anywhere, at least very fast. Of course, I would like to take advantage of those low rates and secure a mortgage – so don’t move too fast on that one Fed. My parents always taught me to be smart with my money, and I pretty much have taken that to heart. They, like our current government, didn’t do so well with spending just the money they earned, but it’s the thought that counts, right? Well, maybe with parents, but I do believe it’s time for our government to show some fiscal restraint perhaps event to the point of fiscal austerity. Otherwise, I’m afraid we’ll just keeping slogging away.

From a micro viewpoint, I do know of one person who landed a job, a good job mind you, in recent months. And I cannot think of anyone getting laid off in recent months. My clients, those still standing, seem to have settled down and are investing some money into their marketing communications efforts. The experts say these positive instances may be temporary until the capitulation. SO

Congress should raise the debt ceiling, or the legal limit on U.S. borrowing, before it reaches capacity in the next few months to avoid threatening the U.S. credit rating, Gross said in an interview today on CNBC. After candidates supported by anti-deficit Tea Party activists were elected on pledges to rein in spending, some lawmakers have said they would demand budget cuts in exchange for voting to raise the debt ceiling.

Filed Under: Financial, News

What is your money personality type? (I’m a hoarder)

October 31, 2010 By

Olivia Mellan told our gathering at the Federal Reserve Bank of Kansas City (October 21, 2010) that we can take steps to gain harmony with our money. First, determine our money personality types, one of the five she describes as hoarders, spenders, money monks, avoiders and amassers.

I think it’s safe to say in our relationship, I’m the hoarder and my spouse is the spender. Olivia says opposite money personality types in couples are a frequent occurrence.

Our past history with money – while growing up in particular – has a lot to do with how we handle money as adults. The good news is that Olivia believes that we can make positive changes in our individual and joint (couples) behaviors in regard to money through exercises, dialogues, and other communication techniques.

Filed Under: Financial, News Tagged With:

Economy on the mend

October 7, 2009 By

C. Fred Bergsten, director of PIIE, told us the USA economy is on the mend Monday night at the annual banquet of the International Relations Council of Kansas City. Bergsten is the director of Peterson Institute for International Economics, and believes that most economic forecasts are too gloomy. PIIE predicts that real GDP growth in the world will be 4.2 percent in 2010 over 2009, and real GDP growth in the United States will be 4.0 percent from the middle of 2009 through the end of next year. This is only about two-thirds the pace of typical US recoveries from sharp recessions but it is nearly double the consensus predictions of other top forecasters.

PIIE asserts that a V-shaped recovery is still the most likely course, meaning a they anticipate a steep recovery following a deep recession. Many forecasters have predicted a flat, slow recovery. Let’s hope Bergsten and PIIE are right, but I’m not going to go into big debt until things feel a lot better!

Filed Under: Financial, News