The massive level of interest continues to build around social media and its use in the regulated financial services space.  On December the 2nd I had the opportunity to be one of the speakers on a Webinar hosted by the Insurance Marketplace Standards Association (IMSA) entitled, Social Media Communications…It’s Here to Stay.  The session offered an interesting glimpse into the current state of the regulated financial services industry. Topics included:

-Practical business approaches for financial advisors
-Real world stories from an industry leading firm in terms of wanting to adopt the technologies but struggling with how
-The specific FINRA/SEC regulations governing use
-The technology available to deal with these regulations today

To emphasize the power and longevity of these tools, the session kicked off with the Socialnomics video which we have profiled before. This set a solid framework for Kip Gregory from The Gregory Group to cover the practical side of a financial advisor using these tools (specifically LinkedIn in this case) to build their business.  This type of practical use case is critical in this industry.  One thing that we continue to hear industry-wide is that there is a lack of clarity around how independent registered representatives in the field might use these tools to build their business.

Insurance companies continue to feel pressure from the field to open up access and this makes perfect sense for these advisores with small businesses and limited resources to be interested in going where the market is.  Kip talked about using your LinkedIn connections and LinkedIn companies and groups to make connections through your network with high value prospects and then to reach out to them through this common channel…powerful, practical stuff.

This part of the session stood out in contrast to the next speaker who was representing a firm and talked about their strong desire to embrace these tools but the current corporate directive is to prohibit access.  Most of the firms that we speak to in the industry fall into this category, i.e. a strong desire to understand and embrace the tools but struggle to effectively deal with the regulatory or corporate policies.

While John Travagline from IMSA did a great job of presenting the rules and regulations around both supervision and monitoring, i.e. FINRA Rule 3010, FINRA Regulatory Alert 07-59 and the Books and Records requirements including SEC Rule 17a-3, SEC Rule 17a-4 and FINRA Rule 3110, it was clear that most firms were going to wait until the FINRA task force releases its findings and possible policy adjustments in March.

FINRA has made clear that while there is some willingness to be flexible on the Supervision and Monitoring regulations, that the Books and Records regulations will not be revised as they are SEC requirements.  We are all waiting on the edge of our seats to see what changes with the task force findings.

We had the opportunity to follow these speakers with a presentation of an industry first, social middleware, which allows companies to open up access to these social sites without losing control or introducing regulatory risks.  Our objective in the session was to expand the thinking beyond simply controlling and managing towards thinking about true enablement capabilities.

It is always fantastic to participate in sessions like this with a mixture of representatives from compliance and the business.  Ultimately both sides of the house need to work together to empower the business. It is always fun to show what we refer to as the “Art of the Possible” with these technologies.  I truly believe that this industry is at a tipping point and other regulated industries will soon follow suit.  For example, the FDA recently held hearings on the use of social media in the pharmaceutical industry but no specific guidelines are expected for a year.

There may be a watershed event, like the publishing of the FINRA task force findings or more likely, the brave and progressive firms, many of whom we are working with that are trailblazing in this area, will begin to share powerful case studies of the sales, servicing, communication, recruiting and collaboration benefits that they are realizing from embracing social technologies.

One thing is for sure: the attitudes toward these technologies and the assumptions about their long-term impact have changed dramatically.  Where once it was assumed that these technologies would be prohibited, very few firms continue to hold that position and the IMSA conference was a great representation of how far we have come in a short amount of time.