Unlikely Friendship: Social Media and Compliance

FriendshipPart 1 of 3 in our Social Media series.

Social media. The right policy coupled with the right technology can bring significant success to your firm. By knowing the ins and outs of social media, potential risks, and best practices, in congruence with regulatory requirements, you can realize significant growth for your business, particularly in that coveted millennial demographic.

I understand the hesitation and fears around taking your firm social, particularly while navigating the increasing regulatory environment of the financial industry.  So let’s look at the challenges that could face your firm as a social business, how to overcome them, and how you can realize the value of going social.

First and foremost, you should strengthen your corporate governance by defining your own policies. Make sure that both firm policies and regulations set by FINRA, the SEC, and the FFIEC are known and practiced company-wide.

Tasked with protecting the public, investors, and financial institutions, the SEC, FFIEC, and FINRA have each outlined regulations and notices pertaining to social media and compliance. As FINRA contains the most detailed of the three, we have highlighted the five essential areas of note for firms looking to develop their social media strategies.

  1. Record-keeping: If you type it out, it’s “written”
  • You are already required to capture and archive all business communications from day-to-day operations of your firm. The same applies for social media. All communications must be recorded and we’re talking everything, no exceptions: tweets, Facebook posts, LinkedIn updates, InMail, Direct Messages, third party content, advertising—even those on employee’s personal devices.
  1. Testimonials: Avoid Endorsements
  • Testimonials are prohibited for investment advisors in the financial industry and must be qualified for Registered Representatives (RRs). These could include “Recommendations” and “Skills” on LinkedIn, “Retweets” on Twitter and “Likes” on Facebook.
  1. Suitability: “Know Your Customer”
  • On social media, it’s nearly impossible to know the investing criteria about all your followers, thus it is prohibited to offer recommendations or advice for investing.
  1. Advertising: Nothing is new for social media
  • When it comes to advertising, all existing advertising rules for traditional media apply to social media as well.
  1. Supervision: Review and Pre-approve
  • Be crystal clear on what your firm allows and does not allow on social media. Put policies in place to govern such rules.

Feeling a little overwhelmed? Not to worry! It’s important to be aware of the relevant regulations, but it’s actually quite simple to get started on social networks. So keep your eye on the prize and let us guide you along.

Social media channels can provide numerous opportunities for growth and success of your business. Merely “listening” on social media by paying attention to what your audience is talking about and posting, can bring in new prospects, leads, and even result in new deals. Leveraging social media enables you to reach new audiences all from the comfort of your desk.

Check back in two weeks for Part 2: how to attract the next generation of clients with social media. Later, I’ll also discuss how to build customer relationships and retain top talent via social networks.

To learn more about how to implement the five essential regulatory areas and realize these benefits, watch our Recorded Webinar: Social Media and Compliance featuring guest experts, Joanna Belbey and Phil Gerbyshak, of Actiance.

Miguel Rodriguez leads Advent’s social media program. In his role, Miguel is responsible for Advent’s social presence including Twitter, Facebook, LinkedIn, YouTube, and Advent’s blog. Follow Miguel on Twitter.

Posted in Advent Software, Advisors, Asset Managers, Compliance, Social Media, Trends

Have You Got What It Takes to Shine in Today’s Competitive World?

CompetitionIf you want a picture of the key trends affecting the asset management industry then PwC’s latest Annual Global CEO survey [1] is a good place to start. The report sets out a number of headline findings. But beneath all the figures and insights, for me two major, interrelated issues shine through.

1) Cost cutting

Cost pressures are piling up. Regulation is an obvious one, as the barrage of local, regional and national initiatives promises massive disruption and a huge, and growing, cost burden. At the same time, we’re seeing many asset managers’ fees being squeezed by the shift towards ETFs and passive funds, not to mention the escalating competitive threat from technology and new – increasingly non-financial – market entrants. No wonder almost half the asset management CEOs surveyed said they aim to cut costs this year, while over a quarter are looking to outsource.

2) Sourcing growth

How can you achieve sustainable and profitable growth? Regulation, demographics and changing customer behaviours are all creating openings. For example, PwC predicts a massive surge in global assets under management by 2020, fuelled in large part by emerging markets. It also points out how asset managers are exploiting bank deleveraging, and establishing customer JVs and supplier partnerships to move into new and profitable product, service and geographic areas.

The challenges may be intensifying, but I believe this is a really exciting time for those asset managers willing and able to seize the opportunities. Able is the key word here. Having the ability to change and grow requires the support of a technology infrastructure that can help you identify where the most promising prospects lie, while giving the all-important flexibility to experiment – to quickly move into different product and geographic markets, without being hobbled by massive upfront investment costs and operational overheads.

To my mind, technology should be an enabler of business growth and innovation, not the barrier that so many legacy platforms seem to be. With the right set up, your business really has a chance to shine.

[1] 18th Annual Global CEO Survey, PricewaterhouseCoopers

Mats Berggren joined Advent in 2001, and is now VP of Sales in EMEA, responsible for Advent’s continuous new business growth within Europe, the Middle East and Africa.

Posted in Advent Software, Asset Managers

Top 5 2015 Trends for the Investment Management Industry

Business Financial OutlookCrystal-ball gazing is always a tricky sport. But from our privileged position at the hub of the investment management industry we have a good view of the key issues managers face. So here goes with my predictions for the year ahead:

1) Consumer-led technology takes hold

Slowly I’m seeing the technology we take for granted in our everyday lives creep into the retail financial services space – for example, with the launch of better mobile banking apps, peer-to-peer lending, the emergence of robo-advisors and the like.

The investment management industry has been somewhat behind the curve with this. Take the mobile revolution. As our CTO Todd Gottula pointed out in a recent blog post, so far investment managers have been cautious on adopting mobile technology. However, pressure from clients and employees is now compelling firms to figure out their mobile strategies and policies.

We also expect a further increase in demand for cloud solutions, and are starting to see clients look to us for more collaborative, social solutions that can help you share information more efficiently.

2) Regulation’s grip tightens

The regulatory agenda is really starting to take a hold on the industry. Many of our clients are now preparing for their first AIFMD reporting and filings. Then there’s the question of how to deal with MiFID II, Solvency II, FATCA and a host of local tax regulations …

Understanding what impact these will have on your business and how you can respond as efficiently as possible is vital.

3) “Hybridisation” and outsourcing pick up pace

During 2015 and beyond I expect hedge funds and traditional asset managers to continue to broaden their offerings in an effort to satisfy investors’ appetite for more non-correlated investments. But if you want to gain market share and reduce costs in this competitive landscape, it will make ever more sense to outsource non-core functions wherever possible – including technology and administration.

4) Suitability under the spotlight

The international crackdown on unsuitable advice is not going away. So we expect forward-thinking wealth managers increasingly to adopt sophisticated software tools that allow you to more proactively leverage the data you now need to gather about clients. That will help you more precisely – and efficiently – predict your clients’ needs and objectives, and tailor your offerings to them.

5) Data will be key

Gathering as much data as possible on each client’s profile, objectives and behaviour is at the heart of a future-proof compliance strategy. Many wealth managers are already working on ways to capture the right data and efficiently manipulate and use it downstream, and we expect this trend to continue through 2015.

How you respond to – and, more importantly, get ahead of – these trends will be a key differentiator in your future success.

I’d be interested to hear your thoughts – is there a trend I missed?

Martin Engdal is Market Strategist and Director of Solution Marketing at Advent EMEA. In this role, he has responsibility for strategic positioning of Advent’s solutions in EMEA and for driving Business Development efforts in Europe, Middle East and Africa.

Posted in Advent Software, EMEA, Wealth Management

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