Wednesday, June 10, 2009 The Compliance Considerations Of Social Media Participation
This morning, just as we were adding 50 more names to our Social Media directory of financial advisors using Twitter, we read a bylined article on Ignites.com (subscription required but a free trial is available) that concluded: “Unless investment advisors can figure out ways to present compelling yet balanced advertisements in 140 characters or fewer, the prospects for Twitter as a marketing tool appear dim at best.”
The article by Joshua Broaded, CFA, a principal consultant at ACA Compliance Group, points out significant compliance risks posed by Facebook and LinkedIn users who clearly have not been trained in the limits of what they can say. Having been responsible for marketing communications at a few asset management companies, I’ve also winced at quite a few out-of-bounds statements that I see being made online by advisors and asset management employees. These betray a lack of training and supervision. My suspicion is that the offenders are rookies.
This is another side of the transparency that comes with communicating today—if your systems and people aren’t current, the vulnerabilities may be inadvertently revealed by people using the newer communications channels. For example, I’ve seen tweets by job candidates heading toward or leaving job interviews. Vendors, too, are commenting on business strategies.
The social networking sites serve as a means of publishing some of what shouldn’t be said in the first place. Let’s not blame social media for training or policy inadequacies that need to be addressed within a company.
