Posts Tagged ‘Social Media Liability’

State DOTs are paving more than roads

Tuesday, March 2nd, 2010

roadsignThe American Association of State Highway and Transportation Officials (AASHTO) just published a report looking into the use of social media across the country’s state departments of transportation (DOT).  In total 32 states participated in the study. You wouldn’t think that your state DOT would be a leader in social media but then you would be wrong.

State DOT Social Media Usage:
- 91% use Twitter
- 45% have an active Facebook page
- 64% have a YouTube channel
- 33% offer podcasts
- 45% participate as a member of LinkedIn

The study points out that state DOTs find social media a more efficient way to reach the public with time sensitive traffic and travel information. Survey respondents found Twitter, RSS Feeds, Podcasts and Facebook to be the most effective in reaching their audience.

The Texas Department of Transportation has been one of the DOTs paving the way with social media.  Scanning their Twitter feed (@TxDOT) you can see everything from general news to time sensitive data such as road closures. For example, here is a post they made after the terrible incident with the plane crash in North Austin:

Posted on Twitter:
A small plane crashed into the Echelon Building on Mopac and US 183 around 10 am today. Emergency crews are on the scene. Expect delays. 10:56 AM Feb 18th

One area the report did not focus on was the ability for customers to connect and communicate with their DOT. Most of us would not think to send an email or call our state DOT but commenting on a Facebook status update, retweeting a post or asking a question over this media is very powerful. Here is a great example from TxDOT’s Facebook page.

Screen shot 2010-03-02 at 7.18.15 AMMar 2, 2010

The other area not touched on is the requirement to comply with public information laws. There is a lot of discussion as to whether or not social media falls under the guidelines of public information. Most compliance officials say it does, as long as the information created is used to conduct of state business. 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.

If you are a government or state agency engaging in social media I would encourage you to investigate this issue more closely. At a minimum start taking advantage of tools available to automate the capture and archival of your social media content.


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Social Networking: Going Online Without Crossing the Line (Research Magazine Cover Story)

Tuesday, February 16th, 2010

RES-March310-Cover-200pxIn the March edition of Research Magazine they take a detailed look at the challenges financial advisors face in dealing with social networking sites like Facebook, Twitter and LinkedIn. As they point out “Some have blocked access to networking websites from advisor workstations. At least one broker-dealer requires new hires to delete their LinkedIn profile as a condition of employment.”

The challenges are very real in these highly regulated environments. Kip Gregory sums it up well “Who could blame any firm operating in a regulated industry for taking a cautious approach in the face of all that? Especially in financial services, which is at its core an industry built around the management of risk. The question is: How do you, as a competitor in this business, choose to respond to a clearly shifting landscape?”

Of course the latest move by FINRA helps ease some of the concerns of these financial firms. With the release of Notice 10-06 they address some of the big questions firms are asking. In addition to this Notice you can also download the Companion Guide to FINRA Social Networking Compliance. And if you are still hungry for more information be sure to check out the play-by-play summary of the February 3rd FINRA webinar on this topic.

The article then moves on to discuss the “techno-solutions” to solving the social networking compliance problem. They highlight our Risk Manager solution for it’s ability to turn on or off any part of a social network that could cause a compliance issue. In addition, there is discussion around our ability to moderate content before it hits the social sphere as well as providing full capabilities to do a post-review after the fact.

I don’t want to give the entire article away so let me just leave you with a few final thoughts:
- Social networks are here to stay and the firms that find ways of adopting them first will have a big advantage. In fact the article points out that “100 percent of the 48 firms surveyed thought social media was here to stay and 84 percent thought it would have a lasting impact on financial services.”
- You do have to create a social media policy (don’t skip this step) – here is a good place to start (first paragraph)
- Look for ways to institutionalize your policy through social networking compliance solutions.
- Plan for change – the sites change, compliance issues change and the way advisors use these tools will change.

Read the full Research Magazine article here

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Real world advice for independent advisors, an interview with Kristen Luke

Monday, February 8th, 2010

wmmlogoKristen Luke, from Wealth Management Marketing, was gracious enough to spend some time talking through her work with independent investment advisors and financial planners. We specifically discussed social networking, what’s holding her clients back and how they are dealing with SEC and FINRA compliance issues.

1. Tell me a little about your background and Wealth Management Marketing
“Prior to starting Wealth Management Marketing in October of 2008, I headed up the marketing department of a boutique wealth management firm in San Diego for 3 years.   It was a natural transition from working at my previous job to starting WMM since I performed similar tasks, but now I do it for a variety of firms instead of just one.   I have a BA in Business Economics from the University of California, Santa Barbara and an MBA with an emphasis in Marketing from San Diego State University.  WMM develops marketing plans for independent advisors and also provides the back office support required to implement the strategies. Basically, we are an in-house marketing department outsourced.”

2. Can you profile the clients you typically work with?
“I primarily work with independent investment advisors and financial planners.  The majority of my clients are RIAs which can range from solo practitioners with $10 million in AUM to firms with 20 employees with a few hundred million in AUM.  I also work with individual advisors at larger brokerage firms who need help creating their own individual marketing plans or are looking for assistance in creating a social media marketing strategy.”

3. What are their top issues/challenges when it comes to social media marketing?
“I consistently hear the same two challenges from my clients:
- Meeting compliance requirements.  Up until recently, it was not clear what an advisor could and could not do according to FINRA.  It is still unclear about what the SEC requires.  So many advisors tell me that their compliance departments won’t allow them to participate in social media.  I’m not sure if this is going to change now that FINRA has released their guidelines.”
Quick Note: The Companion Guide to FINRA Social Networking helps address these questions.
- “Finding the time to participate in social media.”

4. What percentage of your clients are engaged with social networks today?
“Almost 100% of my clients are engaged with social networks in some way.  Most of them are only involved with LinkedIn.  Closer to 50% are involved in Facebook or Twitter for business purposes.”

5. For those that are active how are they dealing with compliance issues?
“Some advisors have not been concerned about it and are doing nothing.  Others are passing everything through their compliance departments prior to posting on LinkedIn, Facebook and Twitter.  Others are using sites likes Socialware to archive their social media activity.”

6. What would recommend to your clients that are getting ready to start engaging with social networking?
“I would recommend that they first understand what they can and cannot do from a compliance standpoint.  Then I’d recommend they start playing around with the different sites to get an understanding of which ones they like.  I find that the advisors that are most successful with social media are the ones who personally enjoy interacting on the different sites.  Once an advisor has a basic understanding of social media, it’s important to create a plan of action.  This includes finding their target market and centers of influence on the different sites, determining what type of information to broadcast and how often to do so.  Social media is like any other type of marketing.  It should be planned out to increase the likelihood of success.”

It is clear from our day-to-day conversations and interviews like this that social media will continue to play a big role for independent investment advisors and financial planners. As Kristen points out it is critical to understand the compliance issues before jumping into this new channel of communication. I’ve already mentioned the Companion Guide to FINRA Social Networking and in addition you should look at the summary of the recent FINRA webinar explaining Notice 10-06 on Social Networking Compliance.

For more information from Kristen you can follow her on Twitter or at her blog.

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Social media policies, regulations and now insurance

Wednesday, November 11th, 2009

It seems there is a new article a day on the increase of social media usage and the need to create corporate policies, train employees on the proper usage and ensure that the brand is not being harmed in the process. Unfortunately, companies are realizing policies are not enough. A report by Deloitte found that “49% of employees say a company policy won’t change how they behave online”.

To compound the problem, new regulations are being issued from FINRA, the FDA, the FTC and many others. Even without these new regulations most companies agree that traditional regulations around communications apply in the new world of social media. For example, SEC’s Rule 17a-4 requires broker-dealers to preserve communications relating to their business and NASD Rule 3110 requires that all electronic communications pertaining to a firm’s business be retained, in a format that cannot be overwritten, for three years.

FINRA CEO, Rick Ketchum, points out that these social networking tools will “challenge your ability to ensure compliance with regulatory requirements”. Translation, regulated companies must start tracking social media participation just like they are tracking and retaining other forms of business communication. This was made very clear in an interview on CNBC where he calls for companies to open up and use social media tools but also points out that there must be an “audit trail” to ensure compliance.

And now today The Hartford announced the availability of social media liability insurance. Here is how they describe the offering: “The Hartford now offers broader coverage for data privacy breaches and social media liability exposures, such as online defamation, advertising, libel and slander”. What’s interesting about this move is The Hartford recognized the problem isn’t going away, or getting any smaller and traditional approaches to dealing with monitoring, protection and enforcement, like web filtering or content monitoring, simply fall short.

So what is a company to do that is concerned about their exposure yet understand that they have to open up access to these tools because the business impact is too great to ignore? We recommend following these steps:

  1. Create your policy: define the social media policy that is appropriate for your business and industry (here is a great list of corporate policies from a variety of industries to help get you started).
  2. Educate the company: train your employees on the proper use of these tools and how to stay compliant with company and industry policies.
  3. Implement and enforce: deploy technology that allows you to control access at the feature level, monitor and moderate content as necessary, retain and archive data and make it easy to produce any social post on demand.
  4. Monitor and learn: watch how groups take advantage of these tools across the organization, highlight best practices and retrain on policies if needed.
  5. Iterate and expand: modify policies if appropriate, encourage broader adoption by employees and expand on the business processes that take advantage of these tools.

And optionally you may want to look at insurance offerings from companies like The Hartford. Liability in the social space has always been a concern and it will be interesting to see how this sector of the industry evolves. In fact, it may be that companies that follow the recommendations above might even qualify for a reduced rate. Time will tell.

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