By John C. Drachman, The Drachman Group, Inc.
It came down to a question of storage.
Despite the hedge fund industry’s hiccups over storing social media content, regulatory requirements for investment marketers to keep records of all social media communications were easily met with low-cost archival systems one can find anywhere.
Ease of storage is just one the liberating aspects embedded in the Regulatory Notice 10-06 on social media of the Financial Industry Regulatory Authority.
Here are a few others:
- Build a social media policy and follow it. If FINRA comes knocking hand them a copy
- File product-related postings as usual
- Treat sites as independent entities, but be mindful of where investment education leaves off and product recommendations begin
Simultaneously FINRA 10-06 has managed to strike a blow for common sense, fiduciary responsibility and freedom of speech.
While compliance officers and investment marketers decode FINRA 10-06, financial advisors are embracing the new regulatory clarification. According to a Rydex AdvisorBenchmarking survey, advisors are looking to primarily use social media tools for “securing new clients (46%), enhancing communication with current clients (35%), and advertising or promoting their firms (30%).”
At Rock the Boat Marketing, Pat Allen said, “To us the guidance seems reasonable.” Ms. Allen sees the door “to the marketing potential of Twitter, LinkedIn and Facebook for financial advisors and firms” swinging open to newly minted Blackberry toting social media strategists.
Over at financial research firmNemertes, the social media cat is happily out of the compliance bag. “The new guidelines bring clarity,” a recent report stated, “but remove excuses for delay.”
Without delay, full speed ahead is required: Nemertes cautions the tidal wave of consultants, archivists, communications specialists, compliance firms and social media strategists, however, to get busy carefully: “Plan to converge or add social media features and capabilities with security solutions for communications media like email and IM.”
Meanwhile, the legal profession is hard at work decoding 10-06 for peers and marketers.Winston & Strawn’s Robert Boresta is scheduled to speak at Knowledge Congress’ Live Webcast on FINRA Guidance on Social Networking Sites on May 4. For George Orwell fans, the agenda also offers “Can IT surveil social sites?”
Will low budgets prevent marketers from taking advantage of all of this good news? Not hardly: While traditional marketers sulk, social media types are taking heart from a new study quoted by Marketing Pilgrim that while 40% of marketers report budgets down for the year, 70% plan to redeploy their resources from traditional print and advertising to Twitter and Facebook marketing.
This resource shift is sure to accelerate as marketers and compliance officers now find common agreement. The release of FINRA’s 10-06 ruling has removed the last impediment to utilizing the cost-efficiencies and creativity of social media programs. Can we expect a new social media marketing compliance lore to come into existence? Distribution consultant, D. Bruce Johnston thinks so: “Responsible, spontaneous, transparent communication can do a lot to put back the heart in this troubled (securities) industry.”