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The recent FINRA case of a broker fined and suspended for violating its social media policy underscores the importance of knowing the rules and what's allowed. In this one-hour conversation with former Fidelity compliance chief Stuart Fross and industry experts, address: - Planning for the regulators - versus failing to plan - The top issues compliance officers and marketers should address to use social media. - Challenges with LinkedIn, other social platforms to engaging clients, prospects - Client comments on advisor blog sites - Elements of a good social media policy (template provided) - Best practices in using social media for advisors and compliance officers. - Strategies and tools for saving time with a unified and compliant approach to social media. Who should listen: - Compliance Professionals - Financial advisors and marketing leaders such as: CMO, Digital marketing heads, content/communications.
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Get Compliant with Social Media
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Agenda
Speakers Bio
Risks Without Compliance & Social Media
Compliance 101
Frequently Asked Compliance Questions
Social Media Policy
How to Train & Educate Employees
The Cost of Compliance
Q & A
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Jennifer Openshaw
• A nationally known expert
• Wall Street Journal columnist
• President, Finect:
• Compliant social media simplified
• Bank of America, BankOne/JPM
• Frequent speaker
• Author of “The Millionaire Zone”
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Stuart Fross
• Partner, Foley & Lardner, LLP • Former Fidelity International General Counsel
• US Securities Counsel, Finect
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Jeff Spears
• CEO of Sanctuary Wealth Services, LLC;
• Former National Sales Manager, Bank of America Private Bank
• Head of Montgomery Securities Private Client Group
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1.
Risks
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What are risks of NOT using social media for investment firms or advisors?Q:
Opportunity Cost
Visibility
Allow Competitors to Define You
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What are risks of using social media?Q: Providing investment advice?
SEC or State regulator
Compliance policies & procedures
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RISK
2.
101Compliance
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What are top issues compliance officers should address when using social media?Q:
Supervision
Compliance policies & procedures
Recordkeeping (including third party content)
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What are top compliance challenges advisors (or marketing staff) face when using social media? Q:
FINRA Advertising Regulations
Expediency
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Summing Up - 3 Rs:
Review content
Recordkeeping
Remove bad content
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How Finect helps you
Compliance officer may review, pre-approve content
Compliance officers remove bad content
Easy access records for all employees
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Static vs. InteractiveContent
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Static Content Interactive Content
• Remains posted until changed
by the firm or individual
• Accessible to all website visitors
• Ex: Blog posting
• Real-time communication
• EX: Chat room, In-mail
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Static Content Examples
Tweets-more flexible: interactive
Profile
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Static Content Examples
Personal bio
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Static Content Examples Wall post
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Interactive Content Examples
Inbox message
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Interactive Content Examples
Comments
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Interactive Content Examples
Like
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Interactive Content Examples
Re-tweet
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What are different compliance rules for static vs interactive content on social media?
Q: SEC guidance on websites Anti-fraud rules apply Advisers Act - Negligent
misstatements or omissions o Advisers Act Advertising
rules/testimonial rules Securities Act / Exchange Act State Securities Laws
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What are different strategies for writing static and interactive content on social media?Q:
Static: Time Relevancy
Interactive: Haters
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How does FINRA view social media? What actions are they taking? Q:
• FINRA: social media like a public presentation• Member firms have the same record keeping
and suitability obligations as with a public presentation
• Commendations may be recommendations • Registered principal pre-review any
recommendation• Interactive social media must be supervised on
a risk-based principle basis
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What do advisors need to know when preparing for FINRA Spot-Checks? Q:
Social Media Blotter
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How Finect helps you
Archives all social media content
Simple & easy to access records
CCOs to remove offending posts quickly & easily
CCOs to assign permissions to employees
Blog post approval process
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3.Frequently Asked
Questions
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What is the best practice for responding to negative comments? Q:
Take the high road – maintain a positive voice
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Are advisors responsible for client’s comments on his/her blog sites? Q:
Generally, no. But take care
Do not “adopt”
Do not “entangle ” yourself
FINRA strong on third party content as not a communication
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Where are sources of your social media (blog) content? Q:
Internal posts are driven by voracious reading and networking
Read Networking
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Strategies for firms or advisors using LinkedIn, Facebook & Twitter for business?
Q:
LinkedIn: Network/prospect and for job postings
Facebook: Business page ineffective seems geared to retail businesses
Twitter: Re-Tweet interesting articles instead of emailing
Google +: SEO impact solution
Don’t MixBusiness & Personal
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3 Things to Know
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Make it relevant
Simple “headlines”
Schedule your time
When a post links to third-party content, are firms responsible for that content (on linked sites)?
Q:1. FINRA: Depends on whether the company has (1) Involved itself in the preparation of the information or (2) Explicitly or implicating endorsed or approved the information
2. OICE guidance:(1) Reasonable safeguard to avoid violation(2) Address possible testimonials (3) Entanglement/adoption
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Will a LinkedIn “recommendation”, Facebook “Like” or Twitter “Re-tweet” violate the testimonial rule? Q:
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The SEC staff doesn’t “like” LinkedIn endorsement
Like - a grey area
Re-tweet – typically not a testimonial
Finect controls
If a post/blog draws regulatory scrutiny, do advisors have a defense if their firm can document a strong supervision process?
Q: Yes!
Supervision is a duty - “failure to supervise” is a violation
Adequate supervision is a defense for supervisors and firms
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Are there any limitations or challenges for advisors using social media when a conversation is supervised? Q:
Time Quality
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Should companies monitor employees’ personal social media accounts? In what situations? Q:
Yes
SEC does not accept personal capacities
Netflix case
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What should firms be careful about when monitoring personal social media accounts? Q:
We view Social Media no differently than we view normal regulatory supervision responsibilities.
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How Finect helps you
Track your employees on social media Social media manager system for CCOs to review what advisors or other staff share on social media
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How can companies successfully get their CCOs on board?Q:
5 steps – Show that…1. The social media site can be made compliant
2. The firm can control access to users
3. The content can be preserved & retrieved
4. Compliance resources to monitor the activities
5. A social media policy & procedure
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How can CCOs and marketing staff (or advisors) successfully work together? Q:
Communication Education
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Education
Improve workflow by:
Adopt appropriate tools
Train & educate employees
Create a social media policy
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4.Social Media Policy
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What are some key components of a good social media policy? Q:
Setting review process and time commitment – most people give up too soon
Decide which metrics you will use to evaluate
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What are the key regulatory requirementsfor a social media policy?
Q:Questions to frame your approach
Can the firm control who has access?
Can the medium keep records of content?
Can records be deleted?
Can firm control who has permission to delete?
Can content be deleted?
Can the firm opt-in/out of functionality?
Can the firm control who can put up static content and document approvals?
Can the firm control who has access to interactive posting on the firm’s behalf?
Can the firm monitor Company sponsored activity in the medium?
Can the firm monitor its employees personal activity in the medium?
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What are the key regulatory requirementsfor a social media policy?
Q:Questions to frame your approach
Can the firm post disclaimers in appropriate places as to:• Its own content• Third party hyperlinks• Third party posts
Has the firm considered and eliminated “red flags”?
If not Does a third party vendor offer a “filter” that could provide a compliance engine?
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What are the key regulatory requirementsfor a social media policy?
Q:Assuming the firm gets to “yes” on the above:
Does the firm have the resources to discharge its compliance obligations?
Does firm have a compliance policy?
Does the firm have a training program?
Does the firm have an approved list of authorized users?
Has the firm considered potential conflicts of interest?
Monitoring program and record of results
Sanctions program
Annual certification of compliance by all employees and by authorized users.
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5.Training & Educating Employees
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At Morgan Stanley, advisors are allowed to use social media after training, and about 4,700 have been approved to do so.
At Wells Fargo’s financial advisor also received compliance and content training.
Real World Cases
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What are the top 3 compliance issues companies MUST educate their advisors about? Q:
Educate, but don’t advise
No predictions; no commitments
Know what you don’t know.
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How can firms develop a social media training program for their staff? Q:
Weekly meetings that include business updates & social media updates
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How Finect helps you
Easy table for employees to view their social media permissions
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6.Cost of Compliance?
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What is the cost of your compliance? Q:
Recordkeeping mechanism: record & retrieve site content
Non-compliance = the most costly
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What is the cost of your compliance? Q: We are the CCO and
Compliance Officer for all of our partner firms
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How should a firm get started with compliant social media? Q:
Start with a platform that makes compliance easy
Install a system
Two choices :
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Q: How should a firm get started with compliant social media?
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Know you goals
Know your brand
Choose your platform
Measure results
4 Steps to Getting Started
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7.Any Questions?
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