Helping the financial industry adopt social networking
Thoughts on "Likes" and "Retweets"?
Recently there has been some debate in the financial advisor blogosphere around the use of the Facebook "Like" button by financial advisors.
Pat Allen of Rock the Boat Marketing wrote a nice blog post about this today on the Advisor Tweets Blog.
Given that "Likes" and "Retweets" pertain to specific pieces of online social content, we generally do not view them as a risk for advisors. However, the types of social content should be taken into consideration. For example, for a financial advisor to "Like" any piece of social content that could be misconstrued as an investment recommendation should not be allowable. On the other hand, if a financial advisor visits a favorite restaurant and publicly "Likes" this restaurant online, or "Likes" a piece of related social content from that restaurant, is this risky behavior? Is showcasing our passions, personalities and interests and building relationships around those themes considered to be a compliance risk? Isn't this how we build relationships in our everyday lives?
Also, if a client "Likes" a piece of social content published or shared by a financial advisor, is this considered a testimonial to the advisor's services? Perhaps this is the more difficult issue to define. However, I am finding it hard to connect the dots here unless there is a blatant recommendation or testimonial that accompanies the "Like".
If financial services firms ban liking, sharing, and commenting across the board, they take away much of the engagement component and opportunity of social media participation as a tool for relationship-building. Perhaps we should consider devising a system for categorizing and labeling social content that might be inappropriate for advisors to engage in "Liking" or "Retweeting", such as content focused on investments or products, rather than focusing on general social media "actions" that can apply to any type of social content on the web. Focusing on the social media "actions" without considering the content seems a bit short-sighted.
Soon, "Likes" on specific content will become as important as inbound links are to a website's authority. "Likes" will be the key to building online credibility and rapport in the social circles that matter most to advisors.
I am interested in hearing more insights on this topic from the group! What do YOU think? Please share your thoughts and insights!
Tags: Button, Facebook, Like, Retweeting
Views: 70
Replies to This Discussion
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Permalink Reply by Stephen Selby on -
1. Liking or Re-tweeting by Registered Persons: Under FINRA Regulatory Notice (RN) 10-06, "liking" and "re-Tweeting" by registered persons is most likely considered a form of "adoption" of content. The upshot is that when an registered person likes or re-Tweets content, they (and the BD) assume liability for the content "liked" or "re-Tweeted." I cover this in an article in LIMRA's compliance newsletter here:
http://www.limra.com/newsletters/LRR/LRR_Newsletter_2010-3.pdf
Liability for content is not only limited to FINRA (and other) regs. There is also reputational risk to consider if a RR "likes" or "re-Tweets" something inappropriate. The good news is that firms can get to "yes" pretty quickly, in my opinion, by applying their present public communication and content standards to liking, re-Tweeting etc., and by putting other reasonable safeguards in place.
2. With respect to the RIA rules about testimonials - we have not seen the SEC provide good guidance on this yet. I believe one of the keys will be whether or not the IAR was actively involved in the distribution of the testimonial. The public can pretty much say what they want about a firm or advisor (certain trading rules notwithstanding) because the public is not regulated by the SEC.
3. Liking or Re-Tweeting by clients: As long as the original content is compliance approved (which may include FINRA filing), I don't see any issues with clients liking or re-Tweeting. In fact, compliance departments can help set ground rules to make sure content is ready for propagation by the public.
Please let me know if this helps.
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Permalink Reply by Stephanie Sammons on -
Thanks Stephen great resources!
Stephen Selby said:1. Liking or Re-tweeting by Registered Persons: Under FINRA Regulatory Notice (RN) 10-06, "liking" and "re-Tweeting" by registered persons is most likely considered a form of "adoption" of content. The upshot is that when an registered person likes or re-Tweets content, they (and the BD) assume liability for the content "liked" or "re-Tweeted." I cover this in an article in LIMRA's compliance newsletter here:
http://www.limra.com/newsletters/LRR/LRR_Newsletter_2010-3.pdf
Liability for content is not only limited to FINRA (and other) regs. There is also reputational risk to consider if a RR "likes" or "re-Tweets" something inappropriate. The good news is that firms can get to "yes" pretty quickly, in my opinion, by applying their present public communication and content standards to liking, re-Tweeting etc., and by putting other reasonable safeguards in place.
2. With respect to the RIA rules about testimonials - we have not seen the SEC provide good guidance on this yet. I believe one of the keys will be whether or not the IAR was actively involved in the distribution of the testimonial. The public can pretty much say what they want about a firm or advisor (certain trading rules notwithstanding) because the public is not regulated by the SEC.
3. Liking or Re-Tweeting by clients: As long as the original content is compliance approved (which may include FINRA filing), I don't see any issues with clients liking or re-Tweeting. In fact, compliance departments can help set ground rules to make sure content is ready for propagation by the public.
Please let me know if this helps.
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Permalink Reply by Neal Linkon on -
We've taken the approach that a "like" or a RT constitutes adoption as defined by FINRA, so we've advised reps to be circumspect about their use of such features. Some things are obviously okay and some things are obviously not okay, but there's a thick, grey line in the middle. I don't happen to agree with those who block such capabilities altogether. Too many things that would be very appropriate -- even helpful -- for a rep to "like" or RT for it to make sense to block the entire feature.
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Permalink Reply by Blane Warrene on -
One goal would be to get distinction between simply "liking" a Fan page so as to follow it (like following a company on LinkedIn) and clicking "Like" on specific content (which we agree leans more toward an endorsement of a concept or idea).
It may seem like splitting hairs - but I believe FINRA and the SEC will have to address this as there is a clear difference.
Facebook would serve the community well to split these functions - following a fan page and liking content.
Neal Linkon said:We've taken the approach that a "like" or a RT constitutes adoption as defined by FINRA, so we've advised reps to be circumspect about their use of such features. Some things are obviously okay and some things are obviously not okay, but there's a thick, grey line in the middle. I don't happen to agree with those who block such capabilities altogether. Too many things that would be very appropriate -- even helpful -- for a rep to "like" or RT for it to make sense to block the entire feature.
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Permalink Reply by Susan Weiner, CFA on -
Good point, Blane!
Blane Warrene said:One goal would be to get distinction between simply "liking" a Fan page so as to follow it (like following a company on LinkedIn) and clicking "Like" on specific content (which we agree leans more toward an endorsement of a concept or idea).
It may seem like splitting hairs - but I believe FINRA and the SEC will have to address this as there is a clear difference.
Facebook would serve the community well to split these functions - following a fan page and liking content.
Neal Linkon said:We've taken the approach that a "like" or a RT constitutes adoption as defined by FINRA, so we've advised reps to be circumspect about their use of such features. Some things are obviously okay and some things are obviously not okay, but there's a thick, grey line in the middle. I don't happen to agree with those who block such capabilities altogether. Too many things that would be very appropriate -- even helpful -- for a rep to "like" or RT for it to make sense to block the entire feature.
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Permalink Reply by Don Rua on -
This is an important topic to me, especially the ability for clients/visitors to an advisor's website to use social media tools to 'Like', 'bookmark', or otherwise share the content. The reason is that much of the focus by FINRA and others has been on advisors publishing through the networks. That brings on the well discussed issues of pre-approval, supervision, and retention. However, the 'like' aspects could be a much lighter effort in terms of infrastructure and resources needed. Therefore, you can give advisor's quite a good dose of social media engagement by spreading those tools around their website, for very little cost or implementation time. But we need to understand more clearly what the regulators position is on a website visitor 'liking' any content on an advisor's site.
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Permalink Reply by Neal Linkon on
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I thought FINRA was clear that reps and advisors aren't responsible for anything a third party does on their site, including posting or "liking." Exceptions, of course, for complaints, but not for basic Wall posts or "likes." In fact, several of us who participated in the FINRA conference calls after 10-06 was released heard the same thing.
We also were equally clear that if a rep "likes" a post or a site, they have "adopted" it's content, whether that be on his/her site, or on another site. If others heard differently or have seen more recent input to suggest otherwise, I'd sure like to hear about it.
Don Rua said:This is an important topic to me, especially the ability for clients/visitors to an advisor's website to use social media tools to 'Like', 'bookmark', or otherwise share the content. The reason is that much of the focus by FINRA and others has been on advisors publishing through the networks. That brings on the well discussed issues of pre-approval, supervision, and retention. However, the 'like' aspects could be a much lighter effort in terms of infrastructure and resources needed. Therefore, you can give advisor's quite a good dose of social media engagement by spreading those tools around their website, for very little cost or implementation time. But we need to understand more clearly what the regulators position is on a website visitor 'liking' any content on an advisor's site.
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Permalink Reply by Stephen Selby on
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You are correct.RRs are not responsible for the behavior of the public. With one exception - "entanglement." It is usually the RR that is "entangled" with a BD. This means that a BD is responsible for anything a RR says / posts in social media. If a RR however induces a third party to tout a RR's performance / services / skills / products, etc. then the RR (and by extension the BD) is responsible for the content. Bottom line is that RRs cannot use people as proxies for posting content and evade responsibility. From a compliance perspective, I would look for a tie between the RR and the "third party" to establish a reason for third party to act as a proxy for the RR. Is there a family relationship? Did the RR offer a rebate (which itself would be problematic) in exchange for the client saying nice things, etc.
Please let me know if you want additional clarification.
Neal Linkon said:I thought FINRA was clear that reps and advisors aren't responsible for anything a third party does on their site, including posting or "liking." Exceptions, of course, for complaints, but not for basic Wall posts or "likes." In fact, several of us who participated in the FINRA conference calls after 10-06 was released heard the same thing.
We also were equally clear that if a rep "likes" a post or a site, they have "adopted" it's content, whether that be on his/her site, or on another site. If others heard differently or have seen more recent input to suggest otherwise, I'd sure like to hear about it.
Don Rua said:This is an important topic to me, especially the ability for clients/visitors to an advisor's website to use social media tools to 'Like', 'bookmark', or otherwise share the content. The reason is that much of the focus by FINRA and others has been on advisors publishing through the networks. That brings on the well discussed issues of pre-approval, supervision, and retention. However, the 'like' aspects could be a much lighter effort in terms of infrastructure and resources needed. Therefore, you can give advisor's quite a good dose of social media engagement by spreading those tools around their website, for very little cost or implementation time. But we need to understand more clearly what the regulators position is on a website visitor 'liking' any content on an advisor's site.
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Permalink Reply by Don Rua on
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I agree with the input, but let me ask your opinion on this: I'm not referring to a social network site with built in tools, such as Facebook, but rather an advisor's own business website. By providing the tools for 'liking' on his pages/content, which he can choose to build into the site or not, do the regulators then feel that he or the firm has a responsibility for those actions by visitors? I'm not suggesting situations where the advisor encourages people to Like his content, but merely provides the tools to do so, which is a choice on his or his firm's part to offer, does that imply any responsibility from the rep or firm?
Here's an example: http://www.chestnutblog.com/financial/financial-planning-through-th...
At the end of the article, you can see many standard sharing tools, such as StumbleUpon, DIGG, and Technorati
Stephen Selby said:You are correct.RRs are not responsible for the behavior of the public. With one exception - "entanglement." It is usually the RR that is "entangled" with a BD. This means that a BD is responsible for anything a RR says / posts in social media. If a RR however induces a third party to tout a RR's performance / services / skills / products, etc. then the RR (and by extension the BD) is responsible for the content. Bottom line is that RRs cannot use people as proxies for posting content and evade responsibility. From a compliance perspective, I would look for a tie between the RR and the "third party" to establish a reason for third party to act as a proxy for the RR. Is there a family relationship? Did the RR offer a rebate (which itself would be problematic) in exchange for the client saying nice things, etc.
Please let me know if you want additional clarification.
Neal Linkon said:
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Permalink Reply by Stephen Selby on
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Great question.
Here's a couple of thoughts:
FINRA RN 10-06 applies to any website with social media content. Not just the major sites.
The public is (with certain exceptions) not under the jurisdiction of the SEC or FINRA. I don't see how FINRA will hold you liable for a public person merely "liking" your content. FINRA regs are really about asserting control over BD's their RRs and employees, not about controlling the public.
As with all things compliance, double check with your firm's compliance department to make sure they see things the same way.
Don Rua said:I agree with the senitiment, but let me ask your opinion on this: I'm not referring to a social network site with built in tools, such as Facebook, but rather an advisor's own business website. By providing the tools for 'liking' on his pages/content, which he can choose to build into the site or not, do the regulators then feel that he or the firm has a responsibility for those actions by visitors? I'm not suggesting situations where the advisor encourages people to Like his content, but merely provides the tools to do so, which is a choice on his or his firm's part to offer, does that imply any responsibility from the rep or firm?
Here's an example: http://www.chestnutblog.com/financial/financial-planning-through-th...
At the end of the article, you can see many standard sharing tools, such as StumbleUpon, DIGG, and Technorati
Stephen Selby said:You are correct.RRs are not responsible for the behavior of the public. With one exception - "entanglement." It is usually the RR that is "entangled" with a BD. This means that a BD is responsible for anything a RR says / posts in social media. If a RR however induces a third party to tout a RR's performance / services / skills / products, etc. then the RR (and by extension the BD) is responsible for the content. Bottom line is that RRs cannot use people as proxies for posting content and evade responsibility. From a compliance perspective, I would look for a tie between the RR and the "third party" to establish a reason for third party to act as a proxy for the RR. Is there a family relationship? Did the RR offer a rebate (which itself would be problematic) in exchange for the client saying nice things, etc.
Please let me know if you want additional clarification.
Neal Linkon said:
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Permalink Reply by Gregory Weiss on -
We are victim to semantics only (the literal definition of the word "Like"). When considering the actual ACTION itself (one can describe the action itself of "Liking" a page as FOLLOWING that page, and showing an interest in reading content on an ongoing basis), the interpretation of said action should be open for further discussion. On Facebook, I "Like" my competition -- not because I necessarily "like" them (I don't dislike them either!), but because I am interested in understanding what my competitors are doing online. From a competitive intel gathering perspective, I need to FOLLOW that company's Facebook page. On Twitter, the semantics are easier to deal with, but in ACTION, "following" a company's Twitter profile is really the same as "liking" that same company's Facebook page.
We don't tell advisors that they are not permitted to wear a T-shirt with a logo of a publicly traded company (Time Warner Cable, Microsoft, Starbucks, Gap, etc) whilst jogging through town on a Saturday morning. Connecting with a company's Facebook page, to me, seems like less of an endorsement, and one that I seriously doubt a consumer would misconstrue as investment advice.
Yes, Facebook has confused things by calling it "Like", but consumer understanding of "Like=connect with" or "follow" is pervasive.
Thoughts?
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