The entrance of social media outlets like Twitter, LinkedIn, and Facebook have posed a challenge to industry firms. How can they take advantage of these huge new marketing and community building media and stay compliant with regulatory guidelines? New challenges give birth to entrepreneurial ideas and this time is no exception.
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Companies who specialize in building software that monitors compliance in firm Twitter messages, LinkedIn profiles, and Facebook pages archive messages and build a cache of pre-approved, pre-written content. They also facilitate oversight of message use by compliance officers.
Such oversight is a complicated task. Success in social media depends on authenticity. It can be hard to sound authentic using pre-written messages. It can also be hard to make sure advisors at firms are using the pre-approved messages and not writing their own. Touting a particular investment or disclosing an advisor’s personal ownership of shares or securities violates regulations. The price for such violations can include being banned from the business.
That said, some firms are allowing advisors to write their own messages, requiring compliance approval before they are posted to a social media site. Social media is already a powerful marketing tool. The evolution
of how firms are taking advantage of social media outlets is interesting to watch.