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April 21, 2011 |
Commonwealth Finds Compliant Solution To Interactive Social Media |
In June, Commonwealth Financial Network will allow and support advisor use of interactive social media. The firm believes it is the first brokerage in the nation to offer its reps a Finra-compliant solution to market themselves interactively through social media, including Facebook, Twitter, LinkedIn and blogs.
Until recently, Commonwealth and other brokerages had found the interactive aspects of social media to be a barrier that was in conflict with compliance. A major concern was that if advisors updated their pages from a home computer, they would have to have their children's pages updated and approved by compliance as well, according to the firm's chief marketing officer, Todd Estabrook.
To circumvent this issue, Commonwealth partnered with Erado Message Control, which was selected as the vendor of choice because it can capture interactivity for a single-user login, while bypassing activity on profiles that are not subject to FINRA regulations, regardless of whether or not they share a machine. "Erado got around this with their underlying technology," Estabrook says.
Estabrook estimates that several hundred of Commonwealth's 1,400 will sign up for the program since that many already have a significant social media presence. The firm has beta tested the interactive technology with about a dozen advisors.
Eventually, Estabrook believes all advisors will embrace interactive social media. "Over time all will see it as part of an integrated, overall marketing plan," he says.
Finra rules allow advisors to convey their thoughts and exchange views interactively about big issues, like the impact of the Japanese earthquake or possible downgrade of U.S. Treasury debt by a bond-rating agency. But advisors are not allowed to discuss individual investment products, since they cannot be certain these vehicles are suitable for everyone who might find them through social media.
Commonwealth is absorbing the per-user, per-month fee for each site, saving individual advisors more than $300 per year on associated compliance costs. |
Commonwealth Finds Compliant Solution To Interactive Social Media |
