As I discussed in a recent post on FINRA compliance and social media, investment advisers need to tread carefully when they engage in social media. If FINRA rules weren’t enough, the SEC has also become a force to be reckoned with when it comes to social media guidelines.

In January of this year, the SEC released its first set of guidelines, the “National Examination Risk Alert: Investment Adviser Use of Social Media” to help investment advisers comply with strict federal securities antifraud, compliance and recordkeeping mandates. Below, I have provided a summary of the SEC’s suggestions for social media use, paraphrased from the Alert, as well as a list of key take-aways. Each should help investment advisers get a sense of what they are dealing with when it comes to ensuring their social media activities don’t get them into hot water with the SEC:

•             Usage Guidelines & Content Standards: Consider creating usage guidelines instructing advisers and their partners on the appropriate use of social media and appropriate content to post, as well as restrictions.

•             Monitoring & Frequency of Monitoring: Consider how to effectively monitor the firm’s social media sites and whether complete access can be given to a supervisor or compliance staff. Also determine how frequently to monitor activity – for some firms, real-time monitoring may be needed whereas periodic monitoring may suffice for others. And determine if your firm has dedicated compliance resources to adequately monitor activity on social media sites.

•             Content Approval: A firm may want to consider the appropriateness of pre-approval requirements (as opposed to after-the-fact review).

•             Criteria for Approving Participation: Analyze the risk exposure for a firm and its clients considering the social networking site’s reputation, privacy policy, ability to remove third-party posts, controls on anonymous posting and its advertising practices.

•             Training & Certification: Consider implementing social media training to promote compliance and prevent potential violations of the federal securities laws and the firm’s internal policies. A firm may also consider whether to require a certification by investment advisory representatives (IARs) and advisory solicitors confirming that those individuals understand and are complying with the firm’s social media policy.

•             Personal vs. Professional Sites: A firm may need to define appropriate behavior on personal social media sites, in addition to sites that are supervised or operated by the firm.

Here are top bullets  from the Alert that I recommend advisers pay particularly close attention to:

• Firms should develop and document a clear social media policy that outlines both internal and regulatory compliance rules
• Advisers using social media need to continuously evaluate their compliance program in terms of social media usage guidelines, content standards, monitoring, approvals, training and more
• Make sure your sensitive information is properly secured and limit the accessibility of this secure data to qualified employees

For more information on regulations and risks that certain industries must keep in mind when it comes to social media engagement as well as guidelines on how to develop a compliant corporate social media strategy, download SocialVolt’s white paper on the

Friday, May 11, 2pm – 5pm ~ Federal Reserve Bank of Kansas City

Free Registration

Join us May 11, for this special interactive workshop and roundtable discussion hosted by Social: IRL and SocialVolt, and featuring special guest speakers from the Federal Reserve Bank of Kansas City,UMB Financial Corporation, and ProfitStars – a global division of Jack Henry & Associates.

A deluge of regulatory requirements has slowed the financial services industry’s adoption of social media. Despite the promise of genuine, real-time interactions with customers that could greatly benefit marketing and sales efforts, social media can present quite a challenge with regard to risk and regulatory compliance.

Financial firms dealing with Financial Industry Regulatory Authority (FINRA) regulations need to be concerned about whether responses their employees provide to customers in social media communities adhere to suitability and investment product recommendation rules. And, any public company needs to be on top of every tweet to monitor whether it complies with the Securities and Exchange Commission’s (SEC) public disclosure requirements.

Financial services companies need to arm themselves with the proper tools and information to engage in social media in an intelligent, compliant way – without completely stifling the creative, genuine nature of the medium. This can be a difficult balance to strike, but it can definitely be achieved.

Sessions will include:

Social Media Risk Management:

Explaining FINRA Guidelines & Establishing a Compliant Social Media Strategy

Scott Oppliger, Founder and CEO of SocialVolt, will discuss the various regulations and risks that financial services companies must keep in mind, and offer guidelines on how to develop a compliant corporate social media strategy.

Lessons from the Front Lines

Melanie Woods, Interactive Marketing Manager for UMB Financial Corporation, will share a case study of how UMB used social media to increase brand awareness and brand sentiment along with some tactical tips on executing social media engagement within confines of a regulated industry.

“…So what do I say?”: Finding Your Social Media Message

What you do want to say is often more difficult than figuring out what you can’t say. Representatives from the Federal Reserve Bank of Kansas City will discuss how they determine what messages have meaning to both the audience and the organization.

Panel Discussion and Q&A

We’ll close with an interactive panel discussion, with plenty of opportunity for audience Q&A and roundtable style dialogue.

Join Social: IRL and SocialVolt for this free interactive workshop and roundtable discussion, hosted at the Federal Reserve Bank of Kansas City.

Spaces are limited. Advance registration is required.

It can happen in a flash – all the brand goodness that gets generated by strong, proactive social media programs can be blown up with a couple of bad tweets.  While social media use among financial services organizations is gaining force, a number of articles have been published recently about the risks.  Here are some potholes to avoid:

• Unclear channels: American Banker , citing a report recently published by Javelin Strategy and Research, asserts that multiple disparate social media accounts can compromise response.  If proper monitoring isn’t in place across all social media channels, questions or complaints are misplaced and response is delayed or non-existent.   Misdirected tweets can turn accolades into drubbings.
• Crisis response is too little or too much: While many banks are quick to communicate service interruptions and outages, the type of information shared can mean the difference between a controlled crisis and pandemonium. The key here seems to be that customers are much more likely to be patient if they understand the reason for the outage.
• When dialogue is a one-way street: Yahoo! Finance cites one example of an executive “fan” page with an underwhelming number of members – which is likely embarrassing for the executive and a troubling situation for the social media team.  The reason?  No dialogue.  Marketers who stick to old message promotion tactics fail the social media test by forgetting to listen – not only to their own channels, but also to what’s being said by and to competitors.
• Allowing regulatory concerns to compromise engagement:  Let’s face it, financial services companies are infamous for restrained communications.  The regulatory environment is stringent and the risks of violation sometimes seem to outweigh the benefit of communication.  Social media in a 24/7 world presents a major challenge – and an opportunity.  The banks that are “getting” it are implementing new content approval and moderation procedures so they can approve content quickly and keep the conversation going.

Stay tuned.  As the financial services industry continues its race to adopt social media, there will be spectacular failures, astounding successes and everything in between.  But, thanks to, well, social media, we’ll be able to watch the story unfold in real time.

Bankers are struggling to stay competitive and meet the demands of an increasingly mobile customer base.  The race is on to develop and promote hot new banking apps.  The good news?  Some of your most effective customer engagement apps may already be sitting on your customers’ mobile devices. With more than 450 million people using Facebook from a mobile device, and more than 55 percent of tweets coming from a mobile device, the challenge is to figure out how to engage customers through existing channels. Here are four social media tactics your bank could start using to engage your mobile customers today:

• Offer freebies.  Forget the toaster.  How about posting and tweeting a coupon code that can be stored on a phone and brought into the branch for a free checking upgrade.
• Give tips. Use Facebook and Twitter to offer useful ideas on surviving tax season or consolidating loans.
• Promote facetime. Stage live QA sessions on Facebook.  Bring in experts who will answer important financial questions. Promote through Facebook and Twitter.
• Start a conversation.  Pick a fun topic and encourage customers to retweet and comment.  For example, “What is the strangest place you ever found your ATM card?” or “What is the craziest giveaway you ever received from a bank?”