Here are just a few places that you will find the Socialware team this month and next…

The National Society of Compliance Professionals 2011 Annual Meeting- We are currently attending this week’s annual meeting in Baltimore, Maryland and plan to attend Stephen Selby’s session on Social Media and Electronic Communications.

LIMRA Annual Conference- Next week, you will find members of the Socialware team at this conference in New York City.  We are looking forward to another great conference hosted by our strategic partner, LIMRA, especially a session on Social Success Strategies with Gregg Weiss from New York Life.

The Future of Wealth Management: Social Media- You can register to attend this FierceFinance webinar on October 26 presented by Lauren Boyman, Director of Social Media, Morgan Stanley Smith Barney and Socialware CEO, Chad Bockius, to learn more about how brokerage and wealth management firms are pursuing social media channels to connect with prospective and existing customers.

FINRA Advertising Regulation Conference- At the end of the month, we will have staff attending this FINRA conference in Washington, D.C.  The conference has very timely sessions including Compliance Considerations for Social Media.

Again, these are just a few places you will find members of the Socialware team.  We are looking forward to the opportunity to network with you.

When you hear API, proxy, or hybrid used, it will typically be centered on the topic of social media archiving. And when it comes to compliance, there are some fundamental facts we know to be true:

• Social is a form of electronic communication and thus requires regulatory compliance.
• Archiving business communication on these platforms is a requirement.
• Archiving some of the communication on social networks is not enough.
• Having an effective system in place to detect misconduct is a requirement (MetLife was fined for this last year – they had a policy for email archiving, but the system of management wasn’t effective?)

Just because this is a new medium, it doesn’t mean that regulators will settle for half-measures or incomplete policies/solutions. Firms have a real challenge to not only address the core compliance risks but also figure out how to make social work for the business. And while you are evolving your strategy, be sure to keep an eye on the regulators. FINRA, for example, is issuing additional guidance in September as an extension to Notice 10-06. And in the midst of all of this, social networks are changing daily requiring a constant focus on how those changes impact policies and procedures.

While the conversation typically starts with compliance, it can’t end there. The other side of the coin is business success. You wouldn’t give the keys to a brand new car to someone who doesn’t know how to drive. Social media in financial services is no different. The guardrails of compliance are critical, but those that are getting access must also have the tools and education to deliver results for the business. If they don’t, why take the chance of giving them the keys to the car?

You might be saying, “Yes, I agree, but we are just going to start with compliance.” I can’t fault that approach. The time this becomes dangerous is when the organization focuses on the short-term deployment vs. the long term strategic needs of the business. It is a little like getting in a car to drive cross-country but deciding to leave your GPS at home. Social adoption is a journey, not an event. The road you set off on initially will determine if that journey ends in success or failure.

This puts a premium on having all of the information and education you can before making a decision. Here are some resources to help get you started:

• Social Media Adoption Life Cycle Webinar
• Morgan Stanley Smith Barney Social Media Strategy (video)
• Social Business Activity Cycle

In addition, here are a few questions you should ask of your team or your technology partners before starting your social media journey:

• Can we capture all of the content being created on social sites for business purposes?
• Can we limit access to features on the social networking sites without removing end users from the social networks themselves?
• Do we need to rely on end users to register their own accounts?
• How do we manage personal vs. professional content on these sites?
• Do you have a strategy for how you will ensure end user success (not just access)?
• Do you have a proven mechanism to associate social activity with business results?

These are just a few of the key questions you will want to dive into. After 3 years and 100+ customers, we can share many other questions that your firm will want to consider.

As I encouraged the attendees to jump into the conversation and share their experiences, questions and thoughts, only a few minutes passed before they responded.  This free flowing conversation created an unmatched dialogue specifically focused on the challenges and opportunities of social media in financial services.  During the forum breaks, there was so much conversation between the attendees representing more than twenty firms including wealth management, insurance, broker dealers, and industry associations, it showed the strong interest in this type of event.

All of us benefited from a variety of presentations including an update on the regulatory perspectives on social media use by Steve Selby, Director of Regulatory Services at LIMRA from the roundtable that Socialware and LIMRA hosted in May in Washington, D.C.  Panelists from Forrester, Guardian Life, LinkedIn, and Morgan Stanley Smith Barney, shared their thoughts and fielded numerous audience questions.  In closing the panel, each speaker discussed the one word that explained social media in financial services with answers including “everywhere, dynamic, efficient, relationships.”

Throughout the forum, attendees also discussed what it takes to adopt a culture that embraces social media and how to ensure firms are focused on the differences between social media and social business including the necessity to measure what the firm values when using social programs.

A lot of interesting stats were shared during the presentations.  For example, according to Forrester, 60% of individuals with investment accounts use social media and more than 90% of households with $1MM in investable assets are online. Speakers also made points including one from Steve Holstein, CMO of Guardian Life Insurance of America, “ Social media is here.  The question is what process to put in place to support it.” To learn more about the Social Media in Financial Services Forum, you can read the live tweets from the event by visiting twitter #fincmo.

Our customers often explain the growing dynamic of social business best.  Here’s one such example:

“We quickly realized the marketing and business development potential that social networks represent for our organization,” said Mark Cohen, AVP Digital Media at Cambridge Investment Research Inc. “Socialware has provided us with the ability to offer the advantages of social networks like Facebook, LinkedIn and Twitter to our advisors while ensuring we remain compliant with regulatory policies.”

All of us at Socialware also truly appreciate our strong industry partners including LIMRA. Here’s how Jim Kerley, President of LIMRA Services, referenced working with our team:

“Socialware provides the most advanced solution in the market today to address the specific challenges that financial services companies face as they seek to reap the business advantages social networks can provide.”

Working with great partners and customers, we’ve continued to enjoy the increasing momentum as the leading firms in the industry build valuable relationships through social business.

In order to best serve those that are interested in learning about Socialware and also those that already know us best, we are excited to announce the new version of socialware.com which just went live a little over a week ago.  You will notice new navigation and organization of our content.

We also recognize that you may need different information on our website based on different outcomes you are trying to achieve depending on your role in your organization, whether compliance, sales, marketing, etc. Finally, we will continue to bring the latest news to you about the best technologies and industry updates to better inform your decisions about social business management.

We always welcome your feedback and look forward to having you join us in conversation by following us here on the blog, @socialware, and also socialturns.

There has been a lot of speculation about what it all means for the industry. Before offering a point of view on that question let’s review what it said exactly:

• SEC: “All documents concerning any communications made by or received by [Adviser] on any social media site”
  In other words, you need to be archiving your social media activity. You should look for an automated approach to capturing all the required content and recognize that unless the solution can capture 100% of the data created on these sites, it isn’t a solution.

• SEC: “All documents concerning [Adviser]’s policies and procedures related to the use of social media web sites by [Adviser]”
  Just like email and IM, this form of electronic communication must be governed by a set of policies and procedures. Your policy should outline at a high level the corporate approach and guidelines to social media.  Your procedures should define the who, the what, the where, the when and the how of the policy itself.

• SEC: “All documents concerning [Adviser]’s policies and procedures concerning a third party’s use of any social media website maintained by [Adviser]”
  The question of 3^rd party comments really hits on the topics of entanglement and suitability. A comment on a social media site alone does not equal an endorsement, but there are situations that you must consider and construct your policy and procedures with those in mind. For example, how will you treat the “liking” of a comment or the “favoriting” of a tweet? If it occurs on the wrong comment you could create an issue for yourself. If it occurs on a benign statement the regulators will not take issue.

• SEC: “All documents concerning [Adviser]’s policies and procedures related to the use of social media websites by [Adviser]’s personnel for personal, non-business related matters”
  The topic of personal vs. professional is a complicated one. First, you are not allowed to have separate identities on social media sites, it is against the terms of service for LinkedIn and Facebook. Second, it is often the personal relationships that ultimately translate to business. There are multiple ways to account for this issue. Some are policy based and some are driven by technology. Check back for more on this topic as it really warrants an entire post.

• SEC: “All documents concerning [Adviser]’s personnel training and education related to the use of social media websites by [Adviser], whether for personal, non-business related, or business related matters”
  One consistent thread from all of the regulators in on the topic of training. If you are going to open up access to social media you must train on the policies and procedures. Additionally, it is a tremendously valuable investment to help individuals understand how to apply these new platforms to accomplish key business goals. On that topic, LIMRA and Socialware have recently released a whole series of training to specifically address everything from the regulatory issues to the business best practices.

• SEC: “All documents concerning [Adviser]’s record retention policies and procedures concerning the involvement with or usage of, whether for personal, non-business related, or business-related matters, any social media website maintained by [Adviser]”
  Not only is it critical to archive this electronic communication, it is also your responsibility to document what is required to be archived.  This documentation should account for the individual Advisers as well as anyone that supports them in their social media efforts.

For those of you that haven’t seen the Sweeps letter, I hope this detail helps. In a follow-up post I will address the following:

• What does the Sweeps letter mean for the industry?
• What should I do now?
• What resources are available to help me get compliant, quickly?

In an article from FA Magazine, Joe Price of FINRA discusses reconvening the social media task force to offer additional guidance on top of what has been provided in Notice 10-06. I for one applaud FINRA for continuing the discussion with the industry on this topic. In 12 short months we’ve seen over 100 FINRA-regulated firms adopt social media in a compliant fashion. These experiences have led to many learnings and some additional questions.

Many firms are also realizing that the honeymoon period is over. FINRA announced their examination priorities for 2011 and social media is one of the 20 areas listed. To quote their priorities announcement “In 2011, firms can expect FINRA examiners to review supervisory systems and recordkeeping for electronic communications like social media.” It should be noted that firms need to account for positive supervisory procedures as well as the reverse (test and ensure that reps are adhering to prohibition, if that is the policy)

Along this journey many firms have inquired about state regulators and their stance on social media. To date we have not seen any specific guidance from these regulatory bodies but we have heard anecdotes of state auditors examining social media policies, procedures and systems to support compliance. Without direct guidance it appears this auditors are using FINRA’s guidance as their measuring stick. This isn’t surprising when you look at the information coming from the SEC and IIROC. The guidance they are providing all looks very similar to FINRA’s.

Back to the topic of additional guidance, in the FA Magazine article described above, Joe Price is quoted as saying “People have said to me, ‘You’re not being creative enough. You’re not appreciating the fundamental sea change going on in communication,’” He points out that FINRA can’t modify the rules on its own because record-keeping requirements were established by the SEC, but does mention “We may need to rethink those old rules.”

There is no doubt this is a unique medium. That being said firms that wait to act are only putting themselves at more risk. Just look at what we found in our Advisor Survey last year. 40% of the respondents stated they were knowingly violating corporate policy to take advantage of the business benefits of social networks. By supporting a policy of prohibition you are actually inviting risk, not reducing it.

In addition, and perhaps more important, you are losing out on all the value that can be driven from these sites. Don’t believe me? Check out the recording of our latest webinar on LinkedIn Business Benefits. You’ll hear about real-world use cases and techniques for transforming your practice using LinkedIn. So stay tuned. 2011 is going to be a banner year for social media – for many reasons…

This infusion of capital is validation of the rapidly growing demand for solutions that will help financial services firms reach their social potential. For Socialware this means aggressively growing one of the best teams in Austin, releasing more ground-breaking solutions, expanding our partnerships and bringing more educational resources to an industry that is desperately seeking to understand how to realize their social potential.

What makes all of this even more exciting is the foundation that we are building upon:

Customers: Today we are the undisputed leader in this space serving nearly 100 customers, which include five of the top national insurance companies, including New York Life Insurance Company; 15 of the top independent broker dealers in the nation; and eight of the top national wealth management firms.

Partners: Socialware signed 5 strategic partnerships in 2010 including LIMRA, the world’s largest association of life insurance and financial services companies, LiveOffice, Smarsh and Global Relay – the top three hosted email archiving vendors, and Symantec, the leader in on premise archiving and discovery.

Education: From the very early days Socialware made a commitment to help educate the industry on the issues and opportunities that social media presents. As part of that effort we launched Socialware Insights – the only information service delivering research, best practices & policies for social media use in the financial sector. To date we’ve had over 4,000 downloads of our Guides, 3,500 webinar views and endless traffic to the site to consume the other great resources that are available.

Community: In addition to the great resources we provide directly we also wanted to create a destination for the community to discuss issues, best practices and news. So we created SocialTurns.com. Today this community is close to 700 users strong from over 20 countries. To help drive the conversation we’ve brought together 13 industry experts as part of the SocialTurns Council – including leaders from companies like Prudential, American Century Investments and The Financial Planning Association.

If you are thinking about joining us, now is the time.  Click here to see all of our current job listings, and of course don’t forget to spread the word.

• Insurance & Technology discussed New York Life’s Launch of Social Media, powered by Socialware
• Socialware was named top tech company to watch by Bank Technology News.
• Socialware was also named 2010′s Best Tech for Advisors by Morningstar Advisor
• Bloomberg featured Socialware in their article Tweeting Rules May Leave Brokers With Little to Say to Clients

In addition, SocialTurns was highlighted by Wall Street & Technology as being a key player in helping capital market firms adopt social media. The site we launched just a few short months ago has already reach over 600 users from 20 different countries. I’d like to thank the SocialTurns Council again for their contributions and support in making SocialTurns the destination for financial professionals to discuss social media issues, best practices and news.

In October, we shared the news of our record growth across the financial services industry. The pace at which regulated firms are adopting social media is staggering. You could have seen this trend coming just by looking at the attendance of webinars like the series LIMRA and Socialware are co-producing on the social media adoption lifecycle.  Not only was the first webinar in the series the most well attended of any webinar we’ve hosted, to date we’ve had over 1,500 participants across the series!

Needless to say this has been an exciting few months and more great things are on the horizon. I want to personally thank the entire Socialware team, our customers and our partners for getting us to this point. We are wrapping up a great year and I expect 2011 to be even better!

PS: If you are looking for a new challenge we have openings in Sales, Marketing, Client Services, Development and Design. We would love to hear from you.

Here is a preview of what you will read about in the article. This is just a quick synopsis so don’t forget to check out the entire piece here.

Like many companies New York Life has created a corporate social presence on sites like Facebook, Twitter and LinkedIn. But now they are underway of their roll-out to agents, recruiters and other employees. Partnering with Socialware, New York Life can now “automate and manage social network policies and usage for New York Life’s more than 11,000 agents and field managers.” And by year-end “New York Life expects to open up use of social-media sites to all of its employees.”

The value of social media is always a top question. When asked about their motivations Tom Shea, the First VP and CTO had this to say: “Agents can use them as a way to connect with customers. Our recruiters see these sites as effective tools to communicate with potential agents. And this is also a great way to get our branding messages out there, to highlight the strengths of our company.”

Given the regulatory challenges of this industry, New York Life like many others had a very simple social media policy: “No.” The need to comply with the SEC and FINRA guidelines simply created too much overhead and risk. That all changed after clarifications from FINRA through Notice 10-06 and the adoption of Socialware’s Compass solution to help automate the compliance and supervisory risk.

Shea pointed out “if customers have a question on a social media site, you can’t tell them ‘I’ll have an answer for you after my compliance department reviews it.’ But you still need to have all correspondence available for review after the fact. So that’s where the need to capture, store and archive comes in.”

We congratulate New York Life on their progress in adopting social media. Their efforts set a great example for the financial industry and we look forward to helping them reach their goals.

Read the full article here

Social media has so much to offer the financial services industry yet education, awareness and questions are holding it back. Our hope is that by bringing together industry experts, passionate users and those standing on the sidelines that we will be able to accelerate the adoption of social media.

To help foster and grow the community we’ve created the SocialTurns Council. The Council is made up of compliance, marketing, technology and financial services professionals who are pioneering social media adoption in the financial services industry. Please join me in thanking all of our Council members:

• Pat Allen, Principal, Rock The Boat Marketing
• Debbi Corej, VP of Compliance, Prudential
• Julie Gebert, AVP of Compliance, Cambridge
• Kip Gregory, Principal, The Gregory Group
• Bruce Johnston, President & CEO, Advisolicity
• Kristen Luke, Principal, Wealth Management Marketing
• Christina L. Nelson, Senior Editor, Financial Planning Association
• Stephanie Sammons, CEO, WiredAdvisor
• Stephen Selby, Director of Regulatory Services, LIMRA
• Jennifer Sussman, Director of Online Marketing and Experience, American Century Investments
• Pete Chiccino, EVP and CIO, The Bancorp Bank

In the last few weeks we’ve invited users to sign-up for the preview and the reaction has been tremendous. To date we’ve had almost 500 users join SocialTurns from 13 different countries and the discussions are off and running ranging from enterprise social media adoption, to FourSquare, to employee guidelines.

We invite marketing, technology, compliance and financial services professionals to join the conversation. As you navigate the social media waters this community is here to help you make the right turns to get the most out of social media for your brand, your employees and your customers.

And don’t forget to let us know what you think or how we can improve. Here is one review from David Rosen at The B2B Formula.

See you on SocialTurns.

PS: After you join please add a badge to your website, blog or Twitter profile to help grow the awareness of SocialTurns and help fuel the discussion.