1. What percentage of advisors use social media for business purposes?
2. Are firms taking the necessary steps to support this activity and remain compliant?
3. Are financial advisors getting value from their investment in social media?
4. Are the myths around social media true? For example, the sites are only used by the younger generation, it takes too much time, advisors comply with their firm’s policies and many more.

The survey results answered these questions and many more. Before getting into the results here are a few statistics that describe the pool of respondents:

• The survey was completed by 196 advisors.
• Over 53% of the respondents have over 100 clients.
• Over 40% of respondents are 46 years of age or older.
• Over 21% are part of firms with over 100 financial advisors.
• Over 44% of respondents have an average account size of $300K or more.

The first thing that stood out with this survey is the fact that advisors have flocked to social networks. 60% of financial advisors currently use social media for business purposes and another 11% have plans to use social media in the future. Of the 29% with no plans to use social media in the future, 85% of those respondents are currently prohibited by their firm.

In addition to usage it was clear that investments in social networks are paying off by delivering real results. 47% of respondents reported having identified one or more referrals (new leads/prospects) from their social media activity. 36% said they acquired new customers through social media and 10% stated they identified over 21 new referrals!

It was also clear that firms are lagging behind their reps in this area. 57% of respondents were aware that their company had a policy and 11% of the respondents were unsure if one existed. Unfortunately, the 32% operating without a policy are in direct violation of FINRA’s recent guidance on social network usage.

And if that wasn’t bad enough firms are also at risk due to a lack of social media archiving – a very clear requirement from FINRA Notice 10-06. Only 12% of the respondents archive their data with an automated system. 22% of the respondents manually archive data through screenshots or a copy and paste activity. Not only is this time consuming it is also very error prone. The remaining 66% of respondents are in direct violation of FINRA/SEC guidelines by not archiving this information.

There is no doubt that this is a hot topic in the industry. In fact, the survey results were already picked up by the following outlets:

• Wall Street Journal
• ComplianceWeek
• Broker Dealer Week
• TechTarget
• InvestmentNews

If you are looking for more information please check out the official press release and also be sure to register for our upcoming webinar where we will be reviewing the results of the survey in more detail.

Some of the questions answered in the interview are:

- What is Social Middleware?
- How does it enable or help the Open Government directive?
- Is this something that empowers agencies to adopt Social Networks?
- Is this something that makes these tools more useful?

For answers to these questions and more click the play button below or listen to the interview on the Federal News Radio 1500 site.

Interview description
“As state and local governments move forward using Twitter and Facebook, questions are looming as to how to best use these new social media tools to reach private citizens. Social middleware is being used to help ward off the potential IT risks and compliance issues associated with using social media tools.”

First you will notice a design and usability overhaul for choosing your mode of communication. With the new release you can easily choose your mode (Personal or Professional) via a dropdown. This is a change from the old “button” approach.

You will also notice that search has been added to the toolbar. This will enable you to search your data across all three social networks (Facebook, LinkedIn and Twitter). As far as we know there isn’t another solution on the market that gives you multi-platform archiving and search across all three popular social networking platforms.

Once you get into the search results you will notice a few features that will make it even easier to track down the information you need. First is the ability to filter your searches by social network (Facebook, LinkedIn, Twitter) or by tag (personal vs. professional). In addition, all of your search terms are conveniently highlighted so you can quickly scan the content to find your information.

With Socialware you can export your entire social archive but you can also selectively export data. After completing a search you can click the XML Export button to quickly export those results.

Last, we should mention is the increased control over LinkedIn Recommendations and Tags, a new beta feature on the site. Stay tuned for more product updates and please let us know what you think about the new additions.

For the most part there is nothing new in the Notice. FINRA reinforces their position on long standing electronic communication guidelines reiterating that those rules apply exactly as stated for social networking sites such as Facebook, Twitter and LinkedIn.  For example:

• Recordkeeping – firms ARE required to retain social media records that a related to a broker-dealer’s business.
• Supervision – firms MUST monitor the extent to which employees are complying with policies.
• Pre-approval – firms MUST define their policy for pre or post approval depending on their risk profile.

While reinforcing some of the core guidelines there were a few key clarifications that make adopting social networks a little bit easier in the financial services arena.  For example:

• Static vs. Dynamic content – a registered principle is still required to pre-approve any static content such as a profile or Twitter background details. Dynamic content such as wall posts constitute an interactive electronic forum and therefore firms do not have to have a registered principal approve these communications prior to use.
• Third-party posts – FINRA clarified that posts by customers or other third parties are not governed by rule 2210. However, if a firm endorses one of these posts they may become attributable to the firm.

While this update is a very positive step for firms there is still the open question of how to address the compliance requirements in an automated fashion.  Additionally, FINRA does not address every fine grain issue you will run into on social networks that could trigger a compliance violation. For example, does Favoriting a tweet trigger rule 2210 because of an endorsement? And more importantly how will protect your firm from these possible violations?

To help firms accelerate their adoption of social networking tools Socialware has released the Companion Guide to FINRA/SEC Social Networking Compliance. This guide provides a detailed analysis of social networks and how their capabilities can trigger regulatory rules. Furthermore, it provides a clear checklist of requirements to evaluate social networking compliance solutions.

For more details you can read the press release and download the guide now.

As Melinda Catapano points out in the article “if this is connected to official agency work, you better be able to produce that record.” But aren’t these consumer sites, just used for personal use? The answer is it depends. While the lines are blurring between personal and professional use on these sites one thing is clear. If you are using them to communicate agency work you can be assured that it is going to be governed by the same set of principles that govern other communications

In fact, Wisconsin Attorney General J. B. Van Hollen recently issued an opinion in which he states that electronic communications made by elected officials are public records, even when they are posted on social networking sites. Van Hollen states that the Wisconsin Public Records laws applies whenever the content is connected to the official’s purpose or function.

One option many agencies have employed is to simply block access to these sites. That course of action flies in the face of The President’s Open Government Directive.  These sites are the perfect platform to create transparency, participation and collaboration. The Bright Side of Government recently did a blog post that discusses this exact topic. Of course with increased levels of participation comes the need to comply with the federal guidelines such as the Freedom of Information Act and the Public Information Act.

Catapano admits that “she, like numerous other CIOs, didn’t have a clue as to how to archive external social networking posts”. She goes further by saying “it would probably be a good master’s thesis because everybody needs those answers and everybody seems to be avoiding the problem.”

Well there is good news Melinda. One you are not alone in that other industries are struggling with this same challenge. Here is a quick snapshot of the issues that financial services organizations face around embracing social networks.  Second, there actually is an automated solution to archiving social network activity and content. Socialware’s Risk Manager solution was built from the ground up to solve this problem and many others that can arise from business related usage of social networks.

Today we are currently working with a number of government agencies and look forward to sharing their success stories over the coming weeks and months. In the mean time if you are interested in signing up you can request a free invitation here.

I will be the first to say that policies are important when it comes to opening up the social web to your employees. But a word of caution, don’t stop after pressing the save button.  In a recent report from Deloitte they posed the question to employees “what is your company’s policy when it comes to use of social networking channels”? Here were the responses:

• 26% – There are specific guidelines as to what you can and cannot say online in relations to the company and/or client matter
• 7% – The policy is to use your discretion when it comes to posting comments and opinions on the world wide web and social networking sites
• 11% – There is a policy, but I don’t know what it is
• 23% – There is no policy
• 24% – Don’t know if there is a policy

Note that 58% either don’t have a policy or don’t know what it is. This should be concerning. After all if your company believes it’s important enough to create a policy isn’t it just as critical to ensure the policy is followed? On that topic how will you monitor it to ensure compliance? In regulated industries like financial services and government this is even more critical as regulators require that certain activity be captured and archived.

The Independent Insurance Agents & Brokers of America (IIABA) recently published a great resource titled “Creating a Social Web Policy for Your Independent Agency”.  The report offers some very good recommendations and detailed steps on how to go about creating a social media policy. However, there are two recommendations that I would like to expand on.

The first is related to “compliance with federal and state discovery, document retention and other laws and agency procedures.” In the guide they state “employees should copy and paste any client specific social media communication into the agency management system and record an activity in the same manner they would in using other media.”  While that is one way to capture and retain the data it is enormously unproductive and it also raises questions around completeness of the archive.

What happens if someone forgets to take these steps or decides they simply don’t want to? A better approach would be to leverage automated solutions, like our Risk Manager product as an example, that sits between the end user and the social networks to automatically capture and retain the content. Not only will this eliminate the manual work around data capture and retention but it also guarantees completeness.

The second is around advertising statutes and regulations. They correctly state that “social media posts are communications subject to various federal and state laws/regulations, including characterization as advertising under some state laws, so employees should make sure they are complying with all such laws in using social media.” This is correct. The detail that is missing though is how you will comply in this new environment. Again I’ll go back to our Risk Manager product as a mechanism to help ensure compliance on this point and many others.

I encourage you to download the IIABA report if you have not created your social media policy. If you are looking for more information on how the FINRA/SEC rules impact social network use you should take a look at this summary as well. Last be sure you have the tools in place to make it as easy as possible for your employees to meet the policy and compliance guidelines as they start to use these powerful sites.

Cisco

Here are a few of the study highlights.

The first set of findings point to the increased use and integration of consumer-based social networking tools in the enterprise.

“75 percent identified social networks as the consumer-based social media tools they primarily use, while roughly 50 percent of the group also identified extensive use of microblogging.”

This part is old news. Organizations are racing to adopt social networking and microblogging tools to help drive the business and it seems there is a new article about it every day.

“Social networking tools are spreading into core areas of the value chain, including the marketing and communications, human relations, and customer service departments.”

Organizations are now moving beyond social networking silos. They’ve already proven there is value in tapping these tools as stand alone solutions and now they are looking for ways to integrate social into their enterprise processes and systems.  This is the next big wave.

While usage and integration is skyrocketing, companies have been lax in regards to governance and involving IT in their decisions.  Ultimately, this creates a great deal of risk and exposure.

“Only 1 in 7 companies noted a formal process associated with adopting consumer-based social networking tools for business purposes, indicating that the potential risks associated with these tools in the enterprise are either overlooked or not well understood.”

This is likely a result of the unbridled growth of these tools and all the buzz associated with them.  But like any good business decision, companies need to step back, understand what they are trying to achieve, evaluate the risks and put the tools in place to manage the program. I will say that the companies we’ve been working with in regulated industries are taking a very programmatic approach to adopting social.  While other industries may not face the same challenges they can learn a lot from these institutions.

“Only 1 in 5 participants identified any policies in place concerning the use of consumer-based social networking technologies in the enterprise.”

This point has come up before.  If you fall in this camp be sure to check out this list of sample social media policies.  As of today there are over 115 examples.  In addition, here is a great list of government related social media policies.

Be careful in thinking that a policy alone is all you need.  Deloitte found in an Ethics & Workplace Survey that 49% of employees say a company policy won’t change how they behave online. As a result you should evaluate tools to help you monitor activity to protect your employees and your brand.

“Due to the unstructured nature of social networking, companies continue to struggle with policy creation and adoption, as copying an established governance process from other, more structured areas (for example, information technology) often doesn’t work for social networking.”

Until recently companies have had two choices when it comes to social networking sites. Open the floodgates or completely block access. Since these are consumers sites there are no built in management controls for the enterprise. This is one reason why social middleware has become such a hot topic.  With it companies can apply structure, define policies, control access and protect their brand on these open, consumer sites.

“Businesses also find difficulty in striking the right balance between the social and personal nature of these tools while maintaining some degree of corporate oversight.”

We hear this a lot from our clients as well.  On Twitter users can easily create multiple personas.  However, on Facebook and LinkedIn you are only allowed a single account under their terms of use.  As a result there is no way to separate your personal activity from the professional on these sites.

Again the need for social middleware becomes clear.  Adopting this middle layer creates the ability for employees to choose whether or not content is personal vs. professional.  As a result companies can implement policies that give employees the ability to choose what category the content falls under and as a result how that content will be monitored, retained and managed by the enterprise.

“Only 1 in 10 respondents noted direct IT involvement in externally facing social networking initiatives. Although the IT department is typically not involved as a primary decision maker, respondents did recognize the need for these tools to scale and properly integrate with existing business processes to reap maximum benefits.”

There are two items of note here. First for companies to realize the full benefits of these tools they will need direct integration to their people, processes and systems. Building loose connections in a one-off manner to each of these sites it not the answer.  IT will want a single point of integration to marry enterprise processes with the top sites of today and those that will be the next Facebook tomorrow.

The second reason it is critical to involve IT is that these sites have a very real impact on the infrastructure of the enterprise. A report from Blue Coat noted “a company based in the US was having problems connecting with its South Africa office” due to the fact that “the bandwidth on its WAN link was completely consumed and it found that 75% of that traffic was Facebook.”

Of course blocking access is not the answer. In that same report they highlighted a customer that “blocked Facebook and within 48 hours they had to unblock it.  Marketing and HR had complained that it was critical to them getting the job done.”

There has to be a happy medium.  Companies will be forced to open up access to these tools but at the same time they need to manage that access.  One solution to the bandwidth problem is to govern access to those parts of the site that consume the most, like videos and photos.  This way you meet the needs of the business by giving access while not crippling the rest of the network.

In addition to the analysis in the report there are some great perspectives by industry leaders on why adopting these social tools will ultimately be a driver of success and competitive advantage.

“Companies who will succeed in embracing the tremendous power of social networking will be those who design a collaborative IT architecture capable of supporting the use of these technologies and mitigating the risks they pose.”
Nick Earle, senior vice president, Cisco Services

“Businesses need to embrace social media not only to remain competitive, but also to continue to attract top talent. The next generation of leaders will be exceptionally savvy with these tools, so 3M is using social media externally to help us with recruiting. Several of the graduates we hired this year specifically told us that they hadn’t considered 3M before they saw our employer profile on social media.”
Hugh Murphy, e-Channels, 3M U.K. and Ireland

Thanks Cisco for a great report on a hot topic. I’m looking forward to part 2.

So what does that mean…what does it look like…how do you support it and what can we learn from great cultures that we are all familiar with like Google and more local to Austin, Bazaarvoice.

For Socialware it all starts with the team. We are looking for and hiring the top talent across every group. Our goal is to build a company that people are passionate about.  And also to create an environment that is fun, fosters teamwork and is ultimately a place that people are excited to come into each and every day.

To help along these lines we’ve taken a few steps:

Couches, Yes. Desks, No.
Reception desks are so yesteryear.  Every great Web 2.0 company that we have visited has a comfortable lounging, socializing, gaming area at the front of their office…we are no exception.  Nothing brings a company together better than literally sitting around and ideating or just hanging out and gaming together.

Kindle anyone
Taking a page from great companies such as Zappos, we wanted to encourage our team members to read and absorb the things that we believe.  We took the approach of loading up Kindles for folks to grab and read at any time.

DJ booth
Why a DJ booth…first of all it’s cool.  More importantly, we wanted a novel way to rally the team and in our case each event is associated with a song snippit and the team members that drove it get to “mix it up” to announce it.  BTW, I’m pretty sure we beat Twitter to the punch with this one.

Whiteboards everywhere
For ideas to flow and transparency to happen we decided that painting our walls with anything short of whiteboard paint would not suffice. As we say around the office “if it is white you can write”.  Thanks Ideapaint!

“The Best Around” award
In any culture it is key to single out individual accomplishment. Our version is “The Best Around” award aptly titled for this classic number from a Karate Kid movie whose sound track was indelibly logged in our CTO’s mind

Maybe most importantly we are all about drinking our own Kool-Aid or eating our own dog food whichever saying you prefer.  As the Social Middleware company we are fully leveraging our own solutions.

For instance, our Social Stream is driven by our Social Marketer product allowing our employees to separate their personal social networking posts from their professional ones and to promote our company and products using their existing social profiles.

We are just getting started and realize it isn’t the destination but the journey.  So far that journey has been a blast and we will continue to work to make Socialware a place that everyone loves to work.

By the way, if you have an interest in working in this kind of environment let us know.  We have immediate openings which you will find at our jobs page.

The article gives an overview of the company, the problems we are solving in the social space, background on our funding and a perspective from the industry.  On that front here are a few of my favorite quotes:

“Matthew Lees, vice president of the Patricia Seybold Group, a Boston-based research firm, said the social middleware business is still in its infancy as businesses figure out the role of the social Web.”

“Everybody is thinking about how they can use it effectively and prevent what they don’t want to happen from happening,” he said. “What’s definitely here to stay is the tension between what’s appropriate and what’s not appropriate. That’s still being hammered out.”

Michael Coté, an Austin-based analyst for RedMonk said “There’s a need for companies to be more involved with social networking, I think it’s an extremely manageable risk.”

We couldn’t agree more on both fronts! Thanks again for a great piece ABJ.

- TechCrunch listed Social CRM as a top 10 trend in 2010
- There are full blown conferences focused on Enterprise 2.0
- ReadWriteWeb lists enterprise collaboration as a top trend for 2010
- 40% of respondents to an IFS study said that ERP and social networking integration was extremely important
- MarketingSherpa found that overwhelmingly companies are planning on increasing their social spend in 2010 defying economic concerns

2010 Social Spend by MarketingSherpa

Let’s try to simplify this buzz.  Think of it as simply integrating the best of social into enterprise business processes.  For example, social CRM isn’t a new CRM process or solution it is just improved with deeper integration to social networks.  The enterprise has always been “social” but now those interactions can be made more efficient.

This raises a question. Do you really need to make new investments in social software solutions or should you be looking at ways to integrate the social tools that exists (Facebook, LinkedIn and Twitter) into your existing business processes (CRM, Customer Service, etc)?

To borrow a term from CES a few years ago, we will start to see the “convergence” of social technology and enterprise systems in 2010.  Note that I am not saying we will see greater adoption of siloed social applications.  Those days are quickly coming to an end.  Enterprises are realizing that the same business metrics that mattered 5 years ago still matter today.  It is irrelevant how many fans you have on your Facebook page if those interactions are not driving up sales, driving down customer service costs or improving customer satisfaction.

By integrating social networks across your people, processes and systems you get the best of both worlds. You tap into the largest networks in the world, you leverage tools that your employees already know and love and because this social activity is integrated into your business processes you can now measure the exact impact from your social investment.

Here is an example. Let’s say you’ve truly integrated Twitter into your customer service process.  Someone posts a tweet about an issue, your team captures that tweet, it gets imported into your customer service system, it is prioritized and assigned to a CSR and finally it is resolved. In this scenario you can compare metrics like time-to-resolution, cost-per-resolution and customer satisfaction across all communication channels (email, phone, chat and social networks).  This will tell you the exact ROI on your social investment from a customer service perspective.

To accomplish the scenario above enterprises will need to adopt tools, like social middleware, to enable them to move from social silos to social business integration. One option is to adopt social middleware directly to start creating those integrations. The second option is to encourage your enterprise vendors to integrate this layer directly. In my opinion we will see both models take off in the very near future. Time will tell.