The good news is that this is the right first step. And if you are FINRA regulated, 10-06 explicitly points out that having a policy in place is required if you are going to adopt social media for business. By not employing a policy, businesses are leaving themselves open to unnecessary risk. Research shows that firms are behind here. 43% of respondents from a recent survey said their firms either did not have a social media policy in place or were unclear if one existed.

To help kick-start this process Socialware has extended our Insights offering by creating a Social Media Policy Accelerator Kit (read the press release here). The kit provides in-depth analysis and guidance on the key areas your policy should address. In addition to the sample policy language, the kit provides an overview of the corresponding procedures your firm should address. Also included is a policy checklist to help guide you through the process and ensure all steps are addressed before activating your employees on social networks.

Every firm still needs to work through the process of defining their business needs, possible risks and the appropriate ways to leverage social media. What you no longer have to do is repeat the hundreds or hours of research required to pull together best practices and answers around creating a formal policy.

Wade Wilkinson, President and Chief Executive Officer of Securities Service Network, Inc. (SSN) summed it up well. “The guiding principle for our early adoption of social media is to support the growth of our affiliated registered representatives and obviously, we have to use social media in a manner that complies with the rules of our industry. The Social Media Policy Accelerator Kit from Socialware helped us write policies that ensure compliance and afford SSN registered representatives the best opportunity to succeed in their social media endeavors. This guidance has been key to our progress and will continue to provide direction moving forward.”

In addition to the Social Media Policy Accelerator Kit please join Steve Selby (LIMRA, Director of Regulatory Services) and I this Thursday at noon CST for a webinar where we will discuss moving through the Policy Stage of the Social Media Adoption Lifecycle. If you miss the live session you can register and view the recording at any time. In addition, head over to SocialTurns to continue the discussion on this topic.

So what keeps organizations up at night, in light of all these changes? According to 2010 Forrester research, data leakage and ensuring regulatory compliance in using these platforms are among the top concerns of organizations.

Data leakage is the biggest concern, with 82% of large organizations reporting themselves as “very concerned” or “concerned.” In the transparent social web, organizations – especially those with more than 5,000 employees, which is where this research is focused – have cause for concern. Regulatory compliance is another big concern – 66% of those surveyed said they were concerned or very concerned about maintaining compliance while enabling these social sites.

To address these fears, many large organizations restrict access to these and other “non-essential” programs, with almost 60% of enterprises reporting such restrictions. However, as we’ve talked about in the past, prohibition is not the answer.

Smarter companies are creating guidelines and implementing finer-grained controls on a feature-by-feature basis. This gives employees the opportunity to use key social networking capabilities while still giving the enterprise a degree of control. Up to 86% of enterprises have or plan to have such access in place which would allow advisors to, for example, establish a Twitter account or leverage LinkedIn to the fullest, all in a compliant fashion.

This aligns with our philosophy of enabling users to make the most of social networks for business, rather than blocking them. Innovative organizations seek to understand how social networks are used or can be used to build personal and professional networks, then analyze potential risks. The next step? Develop a policy that works by addressing regulatory issues, educating users on the policies, then enable them to use the social networks in appropriate ways. Over time, firms will review actual usage and results, policies will be updated and new ways to make the most of these networks will be discovered.

In short, while enterprises – including financial institutions – have cause for concern, ignoring the power of social networks isn’t the answer. There are many ways social networks will impact business – including creating new referral sources, helping advisors keep in touch with customers and recruiting new talent.

The companies that “get to yes” first will create a competitive advantage, establish themselves as innovators in the industry and enjoy the financial rewards this new communication channel has to offer.

Social Media in the Mutual Fund Industry
Tuesday, August 3^rd at 1PM EST Unified Fund Services is hosting a webinar on the use of social media in the mutual fund industry. Mutual fund managers and financial advisors will learn the best ways to use social media in their businesses, along with updates on recent regulatory changes and new technologies that make social media communications easier to manage. Speakers include: Jeff Young, Unified Fund Services (Huntington Asset Services), Bruce Johnston, Advisolocity, Ellen Bruno, Compliance Advisor Professionals and Oat Ruchira, Unified Financial Securities.

“Although a significant number of financial services professionals use social media professionally, many are not effectively using these tools to grow their businesses,” said Brian Blomquist, president, Unified Fund Services (Huntington Asset Services). “Our web seminar will help participants learn how to make the most of this growing opportunity while remaining compliant with industry regulations.”

Register here.

Best Practices: Driving Business on Facebook
Tuesday, August 3^rd at 2PM EST Socialware will be joined by Stephanie Sammons, CEO of WiredAdvisor, for a webinar titled Best Practices: Driving Business on Facebook. This webinar examines best practices for driving business and connecting with customers using Facebook, keeping in mind the compliance challenges associated with using this site. Learn innovative strategies to Re-Connect, Discover Insights, Distinguish yourself, and Make Fans & Friends through Facebook. Ultimately driving new business and deeper relationships with your customers.

Register here (and if you can’t make it live just check back to watch the recorded version and to also download the slides).

Success Stories: How Advisors are Using Social Media for Business
Thursday, August 5^th at 12PM EST Socialware is moderating a roundtable discussion on how advisors are successfully using social media today to drive their business. We will be joined by Paul Hrabel of One Fund and Curtis Smith of Interactive Capital Management. This interactive roundtable will discuss the use of social media by advisors, how this integrates to an overall marketing strategy, success stories and strategies, embracing social in a compliant fashion and finally tips on how you can sell your firm on opening up access.

Register here (and if you can’t make it live just check back to watch the recorded version and to also download the slides).

And as always if you’ve missed any of our previous webinars be sure to check out the Socialware Insights webinar page.

Syncapse came up with the figure by asking 4,000 fans of 20 of the top brands on Facebook — including Nokia, BlackBerry, Nike, Coca-Cola and Starbucks — why they were fans of those companies or brands, and about their past and future purchasing behavior. Syncapse then estimated what the value of each fan’s spending would be to a company, as well as the value of continuing to have that fan as a customer over time.

Obviously, this is a small sample size, and investment firms can easily argue that this type of data relates only marginally to financial services. Large investment firms may not have coupons, specials, or fun contests to promote via Facebook. However, for building a presence as a brand or an individual agent, keeping your name top of mind, regularly communicating about your own practice, and staying connected in such an easy way with people who have chosen to be your fan can be quite a valuable endeavor, indeed.

According to Syncapse, “A fan base is a self-segmented group of highly valuable customers.” The “self-segmented” part of the equation can’t be overstated – they have opted to hear from you. They are more likely to think of you – and recommend you – to their circle of influence. Consider these findings:

• Fans are 28% more likely than non-fans to continue using the brand.
• Fans are 41% more likely than non-fans to recommend a fanned product to their friends.

Syncapse has observed that an average fan may participate with a brand ten times a year and will make one recommendation; however, an active fan may participate thirty times and make ten recommendations. As a financial firm – and especially as an individual advisory or agent – these 10 or 30 interactions can have a dramatic impact on referring new business and retaining clients.

In fact, this research indicated that Facebook fans were more loyal to the fanned brand than consumers who were not fans. On average, Facebook fans are 28% more likely to continue using a brand than are non-fan consumers. This data illustrates the importance of the audience on short-term and long-term marketing efforts of an organization. In short, not only should a firm and an advisor work to gain fans – it’s also important to keep in contact with this audience.

As any advisor knows, word-of-mouth makes a huge impact on building a practice. While you attend networking events and sponsor local events to meet people in your area, Facebook can be a natural way to help your clients easily spread the word to their friends. Those who have specifically chosen to be your fan are 41% more likely than non-fans to recommend you to their social network.

So how should this data impact your daily life? First, it’s critical – and expected – that reputable firms and advisors have a social media presence. Once you set up your Facebook page, spread the word – encourage your own circle of influence, the ones who know and trust you most, to become your Facebook fan (done by “Liking” your page).

But – even more importantly – give them real value in being your fan. Of course, you can’t recommend hot stocks – but you can point to articles that have direct interest to your clients and prospects, or share blog posts, or ask questions that encourage discussion on your Facebook page – all within the parameters of corporate and regulatory guidelines.

While you may not be selling Coca-Cola, don’t underestimate the value of your online participation in social networks, and keep giving others reasons to pay attention to what you have to say.

Together we will work to help the industry take full advantage of social media in a compliant and effective fashion. As part of this effort we’ve partnered to expand the Socialware Insights program, an information service to provide ongoing support and up-to-date research to financial services professionals using social networking sites. LIMRA and Socialware will expand this offering to be focused entirely within the financial services industry, customizing the content to the functional needs of the various positions.

Our first joint effort centers on the development of a Social Media Adoption Life Cycle for financial services firms. We will introduce this new framework later this week during a live webcast. Stephen Selby, Director of LIMRA Regulatory Services will join us on Thursday, July 22^nd at 11am CST to discuss the framework, the specific characteristics of each stage and key tips on how to move forward on adopting social media in a compliant fashion.

In addition, LIMRA is hosting a Social Media For Financial Services seminar on Aug. 26-27, 2010. This seminar will help firms develop and implement cohesive strategies that leverage the power of social media while meeting regulatory requirements. It will cover a wide range of issues and feature best practices presentations from industry experts and thought leaders. Register now as space is limited. We look forward to seeing you there.

At this point you are probably as shocked as I was. You may also be scratching your head as to how 1,700 people could like his update. What happens on LinkedIn is that when someone in your network “likes” a comment or status update it is automatically shared with that person’s network – instantly multiplying the reach each message has.

For employees who are looking to build their personal networks and for companies looking to build their brand within their business communities, this simple experiment shows how quickly a compelling message can spread throughout a network.  Unlike Facebook updates, where you need to be directly connected to someone, the majority of commenters and fans of Joss’ update have never met Joss face to face.

As a follow up message, Blair posted “Blair Joss is hunting for a professional in the oil and gas industry with experience in Reservoir Engineering and has a network in Norway.”  LinkedIn has clearly given him a platform to meet prospects, colleagues, and customers who may have never been connected to him otherwise, but given that he has a great message and a network that can spread it, he has truly taken advantage of the tools available to him.  How are you helping your employees spread their message?

1. LinkedIn Groups Overhaul

Groups are a great way to connect with the broader LinkedIn network, to find new contacts through shared interests and to discuss specific topics. And now this great resource has gotten better. Last month LinkedIn rolled out an improved look and feel with the goal of replicating face-to-face conversations. The new design also makes it easier to use. With a new voting system, content that is valued by the group will rise to the top and will be surfaced for all to see. Combined with the new following capability, LinkedIn has made it easier than ever to stay up to date on group discussions.

2. LinkedIn Inbox Updates

Speaking of email, LinkedIn has completed an overhaul of their built-in email system. Like Groups it all starts with an improved look and feel that you will notice right away on the home page. In addition, they’ve made it easier to manage emails through bulk actions, something we are all used to in our traditional email clients. And although it sounds strange you can finally delete messages in LinkedIn. This is great from a user’s perspective but compliance officers should take note that real-time archiving should be the goal if you are going to open up access to LinkedIn in a compliant fashion (as it relates to FINRA 10-06).

3. Improved Twitter and LinkedIn integration

I’ve shared before my belief that you get the most value from your social networking investment when you integrate your activities together. LinkedIn just made this process easier. They’ve updated their Twitter application to follow LinkedIn Connections directly from LinkedIn.com. Once you’ve installed the application, access it using the “More” menu and start following your connections.

4. LinkedIn “Likes” Addition

We are all familiar with this concept. You read a status update on Facebook, see a picture, watch a video and you click that little “Like” button letting your network know what you are reading or watching and the fact that you appreciated the content. Well this functionality is now available on LinkedIn. Liking a piece of content in LinkedIn will trigger a news feed update so your network can see what you are reading. On Groups, members who consistently contribute to discussions, and have a large number of followers, will be marked as “Top influencers”, making their ‘Like’ worth more than others. Keep this in mind as you work to grow you reach and influence across the 70 million LinkedIn users.

5. LinkedIn Compliance Guide

With all the opportunity LinkedIn provides many regulated firms have been grappling with the compliance issues and trying to balance those with the business benefit. To help jump-start your efforts we’ve outlined almost 30 LinkedIn features, explaining each in detail, associated it with a content type (based on FINRA 10-06), classified it according to the FINRA/SEC guidelines, offered a set of compliance considerations, and provided a specific recommendation to help jump-start the creation of your social networking policy and plan. If you haven’t downloaded this free guide, get yours today.

6. LinkedIn Best Practices (Webinar)

Like many people we talk to, the conversation quickly turns from “how can we open up access” to “how do we get the most out of our investment.” Thanks to Kip Gregory, Principle of The Gregory Group, and Mike Williams of Socialware, you will get answers to this question and so much more. They share their expertise on how advisors and agents can use this great resource to help drive their business. While the webinar took place in June you can watch a recorded version here.

6.5 Upcoming webinar on LinkedIn Social Networking Compliance

If you are looking for more information on understanding the compliance issues with LinkedIn be sure to register for our upcoming webinar taking place on July 13th. Learn more and register here.

I hope you find these resources helpful. Stay tuned for more great content and updates. And don’t forget to check out our newly revamped site for Socialware Insights – all of our Guides, Resources, Webinars and more now live under one roof.

Twitter awareness rivals Facebook. Awareness of Twitter has exploded from 5% of Americans 12+ in 2008 to 87% in 2010 (by comparison, Facebook’s awareness is 88%). And social network usage continues to grow among all age groups.

Twitter is used by approximately 17 million Americans – about 7% of the population. However, roughly six times more Americans maintain a profile page on Facebook than use Twitter. And almost 50% of Americans over the age of 12 maintain a profile on at least one social networking site, with the vast majority using Facebook.

Most Twitter users are “lurkers,” reading the updates of others without contributing their own updates – at least, not on Twitter. But 70% of regular Twitter users say they do post status updates to some social networking service (likely Facebook). Twitter appears to function as more of a broadcast medium compared to social network sites such as Facebook, still making it a key marketing tool for brands.

More than half of all Twitter users are between 25 and 44, signaling that most users are in prime decision-making demographics.

Business use cases for Twitter far exceed similar usage for social networking sites in general. The percentage of Twitter users who follow brands is over three times higher than similar behavior expressed by social networking users in general. As this graphic shows, Twitter users are more likely to follow brands or companies on social networks.

According to the study, “Significant percentages of regular Twitter users report using the service not only to seek opinions about companies, products and services, but to provide those opinions as well.”

In short, here’s more proof that social networks – and Twitter and Facebook in particular – are here to stay, and users are amenable to hearing from brands via these networks.

You can download the executive summary here for even more details. Don’t forget to grab our Guide on Twitter Social Networking Compliance and watch our webinar on the same topic.

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.

In Penny Crosman’s recent article in Bank Systems & Technology, “Channel Innovation: Building Online Relationships,” she explores the variety of new consumers – and how they view banks and money.

For example, there’s a whole contingent of consumer that focuses on not consuming, such as “freegans” who strive to have no money and live “off the grid.” To reach this and other hard-to-reach markets, banks must up the ante on social and online marketing. For example, 18 to 30 year olds (Generation Y), a Cisco survey found, are heavily in debt, need help with their finances, and prefer communicating via their cell phones. They’re used to having Mom and Dad take care of the finances, and could use the most help from banks – but may not trust them as much.

The bottom line? Financial institutions must innovate to reach the hard-to-reach consumers; however, the good news is that half of all searches for financial products start on the Web, according to Terry Moore, Accenture’s North American banking practice lead. And online personal financial management is on the rise. These aggregators, such as Mint.com or Geezeo, help consumers keep track of budgets, discover new products, and manage accounts from a variety of providers in one place.

In a new trend, though, banks are building their own personal financial advice Web sites – sites that are nearly independent of the bank and that, in fact, barely mention the bank at all. For example, SunTrust’s Live Solid Network looks like a self-help site that could be associated with a women’s magazine.

Ron Shevlin, senior analyst at Aite Group, believes there’s a perfect storm creating demand for personal financial management tools, citing the recession, the regulatory environment and the impact of credit scores on consumers’ ability to get credit. “Consumers are becoming more aware and more diligent,” he says. “[Web sites such as] Mint, Geezeo and Wesabe have made these tools easier to use, and Generation Yers are more online friendly – they want to manage their whole lives, including their financial lives, online. And thanks to all these other factors, there’s a general dislike of banks. [Banks] realize that [personal financial management] can add value to the customer relationship.”

According to Jaidev Shergill, CEO of Bundle.com and a former Citi executive, it’s a matter of trust. “What’s really behind some of this can be summed up in one word: unbiased,” he says. “When you think about the way banks dispensed information and advice two or three years ago, it typically ended up in a sales pitch for that bank’s product. People started wondering if they were really getting the right recommendations.

1st Mariner Bank in Baltimore ($1.4 billion in assets), however, recently became the first bank to sign up with Geezeo’s white-labled online personal financial management, which lets their customers access their 1^st Mariner accounts as well as their other financial accounts from one site.

Steve Kruskamp, e-commerce marketing manager at 1st Mariner insists that online personal financial management “creates a tool that makes the relationship more sticky.”

Additionally, social media is a big part of 1st Mariner’s efforts to attract and retain younger customers. Kruskamp blogs and participate in social media networks regularly. Kruskamp posts messages and videos, including information about upcoming events and industry news, on behalf of 1st Mariner on Twitter, Facebook and YouTube. In fact, a year ago the bank introduced a checking account for Gen Y based on feedback received in social networks.

“We look at Twitter as an extension of communication with our customers,” Kruskamp says. “You no longer have the number of customers coming into the branches and having a one-on-one relationship with the managers. So we wanted to see if there was a way that we could get back those relationships that are somewhat lost. Twitter, the blog and Facebook offer a channel where our customers and prospects are already there.” The bank doesn’t use social media to market products but rather to carry out overall public relations, Kruskamp emphasizes.

Twitter lets 1st Mariner connect with local businesspeople and industry peers. Facebook, however, is more of an opportunity for the bank to interact with customers and prospects in a more social setting, where the bank shares pictures, promotes fundraising efforts and personalizes the brand.

“Facebook brings a transparency that didn’t exist before,” Kruskamp suggests. “Unless someone came to our back office or one of our picnics, they wouldn’t see what we’re doing, that we really enjoy what we do.”

Kevin Lynch, SVP of e-commerce at 1st Mariner Bank, stresses that social media efforts are inexpensive compared to traditional channels and they’re increasingly necessary. “The branch transaction level is continuing to decline, call center volumes have dropped from 65,000 to 70,000 calls a year to 59,000 or 58,000,” he notes. But 1st Mariner’s online customers more than doubled, from 2,500 in 2008 to 5,500 in 2009. “People are interacting with us, that’s the business case.”

Like 1st Mariner, Atlanta-based SunTrust Banks ($172.7 billion in assets) is experimenting with both online PFM tools and social media. The bank’s mostly anonymous LiveSolid Network, which primarily targets 25-to-45-year-old women, went live Feb. 1. Broud Koun, director of digital marketing and direct mail, observes that the demographics of social media sites are sometimes surprising. “It would be incorrect to assume that Facebook, for example, is all about 19-year-olds,” he says.

Not every bank is jumping on the personal financial management bandwagon, however. A recent Aite Group survey found that only one in five banks overall — and only one in 20 large banks — offers online personal financial management. (Of the remaining firms, 60 percent said they will evaluate whether to offer such tools in 2010.) They cite lack of perceived demand and a hard-to-define return on investment.

For 1st Mariner Bank’s Lynch, however, the more important question is whether a bank can afford not to have these personal financial management tools. “Our perspective,” he says, “is that this is a requirement that customers may not know they need yet, but they will.”