Confidential and Proprietary © 2012, Actiance, Inc. All rights reserved. Actiance and the Actiance logo are trademarks of Actiance, Inc.

Leveraging Social Media Amid the Changing Regulatory Landscape

Joanna Belbey- Social Media and Compliance Specialist Victor Gaxiola- Subject Matter Expert, Social Media

@belbey @VictorGaxiola #BDI1

2

#TeamActiance

Facebook.com/Joanna.BelbeyLinkedin.com/in/belbey

@BelbeyAbout.me/JoannaBelbey

Facebook.com/VMGaxiolaLinkedin.com/in/victorgaxiola@VictorGaxiolaAbout.me/VictorGaxiola

@belbey @victorgaxiola #BDI1

3

Compliance

10 of 10

8 of 10Top US Banks

Top European Banks

About Actiance

Key Partners

76%

2 of 3Global Wealth Managers

60,000+Finance Professionals on Socialite

5 of 5Top Canadian Banks

Social

We are the Market Leader

13M+Social Network Connections

Global Operations

North American Financial Services Market

4

@@belbey @victorgaxiola #BDI1

5

Wikis

Public Instant

Messaging

Public Instant

Messaging

IndustryNetworksIndustryNetworks

WebWebUnified

CommunicationUnified

Communication

FutureFuture

Social NetworksSocial NetworksCollaborationCollaboration

Today’s social businesscan’t use just one

collaborative technology to keep its employees connected

– it needs to use them all.

@belbey @victorgaxiola #BDI1

6

Leads to Several Challenges

• Complexity• Adoption• ROI

Enablement

• Feature Control • Data Leakage• Incoming

Threats

Security

• Regulations• Corporate

Policies• Legal Hold

Governance

@belbey @victorgaxiola #BDI1

7

Compliance Overview For Social Media for Financial Advisors

Recordkeeping

Preserve records of written business communications for specific time periods. (If you write it out, it’s “written”.) LinkedIn - Updates, InMail; Twitter - Tweets, Direct Messages; Facebook – Posts, Messages. Regulators only are interested in business communications. Includes Third Party content. Includes personal devices, as content, not source, is determinative

Work with third party to capture, archive and make e-discoverable all written communications. Many firms prohibit retweets to avoid appearance of “adoption and entanglement” with resulting recordkeeping and advertising requirements.

Regulation Definition Recommendation

@belbey @victorgaxiola #BDI1

8

Compliance Overview For Social Media for Financial Advisors

Testimonials

Testimonials are prohibited for Investment Advisors (IAs) and need to be qualified for Registered Representatives (RRs).

Many firms prohibit “Recommendations” and “Skills” on LinkedIn, “Retweets” on Twitter and “Likes” on Facebook to avoid the appearance of an endorsement.

Suitability“Know Your Customer”. Recommendations must be suitable for every investor.

Most firms prohibit product recommendations and investment strategies unless preapproved by a registered principle of the firm.

Regulation Definition Recommendation

@belbey @victorgaxiola #BDI1

9

Compliance Overview For Social Media for Financial Advisors

Advertising

Content standards are the same as other communications. Firms are also responsible for both suitability and recordkeeping of third party content (links, posts).

Most firms prohibit retweets, favorites and likes to avoid appearance of “adoption and entanglement”. Static content, such as a LinkedIn Profile that contains more than business card information, is an advertisement and requires pre-approval. Interactive communications do not require pre-approval. LinkedIn, Facebook and Twitter have both. Supervision, recordkeeping apply.

SupervisionFirms must evidence that they are supervising communications.

Use similar written supervisory procedures already in place. Employ risk based principals for review. Limit access to social media unless supervised. Pre-approval of content is required in certain cases. Appropriate training is required.

Regulation Social Network and RecommendationsDefinition Recommendation

@belbey @victorgaxiola #BDI1

10 @belbey @victorgaxiola #BDI1

11

• LinkedIn – read only– Listening is key, watching connections who matter– Use to see “money in motion” events

• Real results– LinkedIn Connection retirement status change = $2.75m

account acquisition– Job Change noticed on Status Update = 401k rollover– FA obtains 400 new prospects in Energy market– New commercial account opportunity through

colleague’s LinkedIn connections

Case Study: Wealth Management Firm (NJ)

@belbey @victorgaxiola #BDI1

12

• Situation– LinkedIn already available to 1200+– Veteran Advisers, tech savvy– Authentic content

• Real results– @MaryS_rwbaird

• 51 followers• 93 Tweets (at the time)• $1m prospect, later closed

Case Study: RW Baird

@belbey @victorgaxiola #BDI1

13

Drive customer loyalty

A friend sees an owie, and sendsa cure.

@belbey @victorgaxiola #BDI1

14

Leverage your connections

In a company town,

building a network,

closes business for you.

@belbey @victorgaxiola #BDI1

15

Close new business

At a marathon, a supporter, became a client.

@belbey @victorgaxiola #BDI1

16

And finally, will Social Media replace the cold call?

200

158

17

• info@actiance.com• @Actiance• @belbey @victorgaxiola• Further reading:

– FINRA 10-06, 11-39 Matrix – FINRA Social Media Handbook– Belbey Blogs: FINRA Spot

Checks Call for Social Planning

Thanks! Contact Information