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Financial Advisors, Social Networking & FINRA: This Debate Is On
In the last 12-15 months several Web sites have been developed to enable social networking for “financial professionals.” In a few cases, the term “financial professionals” includes the breadth of a network that a client would turn to for financial planning help, including financial advisors but CPAs, attorneys and insurance salespeople, too. Often the networks’ purpose and revenue model is to bring professional and client together.
We don’t have a dog in this fight (let alone a revenue model!). AdvisorTweets is a labor of love for us and we benefit in meaningful ways from the interaction it affords us. Beyond trying to keep AT up and loading quicker, we’re content just aggregating and reading financial advisor tweets.
So we’re just fascinated with the positioning that’s going on with these networks and what can be learned from the discussion. This is a great time to watch the distribution end of the investment industry put social media on for size.
(And as a quick digression, we see that Raymond James is spending some time on Twitter lately with its @RaymondJames‘ Twitter account created in December and its @RJAdvisorChoice account. We know about Northwestern Mutual’s account [@NM_News] and see imposter accounts but if you know of other broker-dealers on Twitter, please comment below.)
But, back to the debate. Yesterday a blog from Facetime Communications questioned LinkedFA’s very reason for being. LinkedFA, to be launched at some point this month, is marketing itself as the “first and only FINRA-compliant social networking site for financial professionals.”
“Facebook, Twitter and LinkedIn don’t comply,” says the video on the LinkedFA site, which doesn’t acknowledge the more targeted social networks that have been created such as Fabeetle and FinanceAnswers.
The LinkedFA compliant claim sounds pretty interesting, right?
But, “Why would financial professionals want a ‘walled-garden’ social media site in the first place? Doesn’t that kind of defeat the objective?” asked FaceTime’s Kailash Ambwani on the FaceForward blog. Facetime’s product line, we should note, includes regulatory compliance solution for financial services customers.
LinkedFA posted its response, and this debate is now off and running.
January 13, 2010 - 10:58 pm
I wouldn’t say that any FA ‘wants’ a walled-garden’, but they don’t necessarily want 70% of what compliance touches in their business. However, they know they must work with compliance to avoid the severe punitive damage the regulators can do. When it comes to social media, many firms tell their FA’s ‘no way, do nothing’. So, a walled-garden, if it meets the approval of their compliance officers, maybe one of their few chances to spread their soc-media wings. Many are still in the learning curve anyway, and would be happy to learn on something safe, to avoid a costly error. Later, when the pitfalls are more well known to them, they may grow tired of the garden.
That said, I’m completely withholding any judgement on LinkedFA, but I’m eager to see the various approaches being explored. SocialWare has an interesting approach, internal IT departments can build their own retention and versioning scripts on their network, and there will be more. I’m also interested to see how more established enterprise players (Orchestria, SharePoint) extend features to assist, and even the social networks themselves, such as LinkedIn, who I believe has talked with enterprises about how they can offer some alternative features or functionality.
I’m finding something interesting in all of the sites and alternatives coming out right now; and eagerly await more specificity from FINRA.
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January 14, 2010 - 9:56 am
Hello Pat thanks for posting this. Regardless of whether or not the linkedfa.com site is compliant, will the people come? Seems to me the people have planted their feet at the big three: facebook, linkedin, and twitter. It is going to be tough enough to persuade them to join yet another social network not to mention that any interaction will be delayed due to pre-approvals. Unfortunately I don’t know if linkedfa will be able to get enough traction unless perhaps the major brokerage firms adopt the technology and employ for their advisors. In the meantime Financial Advisors just need to go out and participate in the existing social networks (where all the people are) while conducting themselves professionally and adhere to best practices with regard to discussing any financial content…or refrain from discussing it at all!
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