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8 Key Takeaways from SIFMA's 2015 Social Media Event

San Francisco was the perfect backdrop to this year’s SIFMA Social Media Seminar focused on social and digital transformation affecting the financial services industry.
As a first-time attendee, I had the pleasure of being a part of a day’s worth of thought-provoking panel discussions, networking opportunities, and expert insights on the future of social business and the importance of embracing and applying new technologies to meet the demands of an increasingly socially connected world.
Hearsay Social was a platinum sponsor at the sold-out event, which attracted over 100 enthusiastic attendees spanning marketing, business, legal, compliance, wealth advisory, and social media roles.
Clara Shih (@clarashih), CEO and co-founder of Hearsay Social kicked things off in a lively discussion on the ROI of social media during a fireside chat with Tom Sagissor (@SagissorTom) of RBC Wealth Management. Sagissor wasted no time in getting right to the point by stating: “Not being a part of the social and digital transformation can be deadly to your business.”
Here are 8 key takeaways that I gleaned from the panel presentations:
1. The key to social business success is to put social media into your business model. On how to use social media successfully, Sagissor said it’s like buying a Ferrari — what’s the point of buying one if you don’t know how to use it? “With social media,” he said, “the key to understanding how to successfully use it is to put it correctly into your business. If you do so, you will become bigger than you ever imagined.” Wow — seems that ROI is priceless, and social and digital are critical to business success.

2. Consumers are empoweredThe fact that 79% of people have their mobile phones near them for all but 2 hours of their waking day, according to social media experts, is an example of the power that consumers have in their hands (literally!) Point is: consumers have more choices than ever because of the availability of products and information online, and this vast increase in choices has given them leverage over big companies aiming to reach them.
3. Companies must seek to be everywhere at all times. Social media may seem like a scary proposition for some, but Clara Shih reminded us that you’ve got to be in all the places where customers are looking for information and help them find it.  She says, in essence, social and digital have replaced the Yellow Pages and if you’re not present it’s as if you don’t exist.
4. Content really matters.  It was refreshing to see advisors speak on the importance of having good content. For instance, David Amann (@davidamann) of Edward Jones said he uses content to “surprise and delight”. Video will also play an increasingly important role, said Devon Slattery of LinkedIn, especially as we “move toward a democracy based world connecting producers with consumers.”

Ian L. Spronck presenting “Financial Services and Social Success with LinkedIn: How Leading Firms Have Driven Adoption, Changed Behavior, and Improved Performance by Strategically Leveraging LinkedIn”

5. Economic opportunities lie within the demographic shifts taking place. Ian Spronck of LinkedIn Sales Solutions shared two startling facts: Today, 50% of investors now rely heavily on financial websites and blogs, ahead of financial newsletters, periodicals and financial planners, and 70% of wealthy investors have restructured their investments and/or altered relationships based on content found on social media. Not only will demographic shifts have a profound impact on social selling, it will shape potential business opportunities to grow your revenues.
6. Without compliance, businesses can’t get to ‘yes’. One of the more hotly debated topics centered around social media compliance as an essential part to growing a business. To address the challenges, one tip that was offered is to set clear policies and implement technological controls, user agreements, and posting guidelines. On the flip side, Yasmin Zarabi (@yasminzarabi) of Hearsay Social reminded us that it’s fine to just adhere to what FINRA requests, and there’s no need to “make undue limits beyond what FINRA is asking.” Amen.

7. Your brand isn’t what you say it is, it’s how the world is perceiving it. Vangard’s Shayna Beck shared how listening is important  to your brand in terms of knowing what content to put out there. While some brands see social as an opportunity, others see it as a risk. But the good news is that more brands are realizing that social is not so scary and businesses are now figuring out ways to amplify their brand to reach the right audiences.
8. Social business success boils down to a committed group of people working together to do what has never been done before. It was interesting to see how many conversations centered around the importance of teams working together, whether at the brand level in how you communicate or the advisor level in how you use technology to engage with clients and prospects. Sunayna Tuteja (@sunaynat) of TD Ameritrade says social is a team sport. The bottom line is that social can no longer sit as a silo within an organization and we have to spread it across multiple business lines, mainly marketing, compliance, and distribution.

Wow, what an interesting time to be part of such a transformational shift.
All in all it was a fantastic event and I’m already looking forward to next year!
Check out our events page for upcoming event information, and please join us as we continue the conversation @HearsaySocial.
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Three social business takeaways from the SIFMA Compliance and Legal Society Annual Seminar

SIFMA-LogoLast week the compliance and legal community gathered in sunny Orlando for the SIFMA Compliance and Legal Society’s 46th Annual Seminar. At the seminar, compliance and legal professionals come together to discuss the significant challenges faced by the financial services community and to explore ways to address ongoing regulatory changes.

The event program was packed with over 65 topical panels and three general sessions including presentations from SEC Chair Mary Jo White, FINRA CEO and Chairman Richard Ketchum, and U.S. Attorney from the Southern District of New York Preet Bharara.


Here we’ve assembled the three main takeaways as they relate to social business and compliance.

Enforcement and data security on the rise

I enjoyed hearing from SEC Chair Mary Jo White and FINRA CEO and Chairman Richard Ketchum, and was happy to hear that both groups are working together more, especially by enforcing actions and being proactive to address those that are operating outside of securities rules and regulations. Regulators at all levels are sending the industry a strong message by enforcing rules and regulations, deterring others to overstep those rules.


U.S. Attorney Preet Bharara may have joked that infractions may not be to the extremes depicted in Martin Scorcese’s “The Wolf of Wall Street.” Infractions do need to be taken seriously, however, as regulators now mine big data for patterns and behaviors that could indicate criminal behavior. Regulators want to be more proactive about identifying risks that could lead to infractions, and now technology allows them to monitor activity and possible threats to data.

Bhara questioned the audience in his presentation by asking, if we hold institutions (and not just individuals) accountable for misconduct, does the enforcement action against a similarly situated company make a difference to their approach to security? I think it does, and I think it will.

At the “Core Compliance Programs and Practices” session, Kevin Goodman, National Associate Director of the Broker-Dealer Examination Program of the SEC, warned that conversations with executives of firms will be deeper than they have been in the past. Executives will need to know about their policies and training and be better prepared to discuss with the SEC the top five risks of the company and what they are doing to address them.

To address these risks, the panel emphasized maintaining, updating, and providing training on policies and procedures. Given the 200+ rules in place and a constant stream of guidance and notices, compliance has a challenging task to keep track of it all.  To stay ahead, firms will need to have the right tools and ensure they are documenting and keeping up with the new rules and regulations.

Technology is part of the problem and the solution

One of the biggest challenges I observed? The industry is struggling to keep up with advances in technology to monitor and control activity.

Ironically, technology seems to be both the issue and the solution when it comes to addressing these new challenges and risks. With the proliferation of employee-owned mobile devices in the past few years, risks have only increased. Firms today need to have “bring your own device” (BYOD) policies and procedures to address the growing use of smartphones and tablets for both personal and business applications. Mobile adoption introduces additional threats including insecure Wi-Fi access, bluetooth discovery and risks of cloud storage. How prepared is the industry to address these new risks?

Business is moving much faster now and technology is providing individual investors with easier access to information. As a result of the increased volume of information and speed to market, it’s becoming a bigger challenge to supervise and provide oversight.


At the “Ask FINRA” panel on Tuesday morning, Susan Axelrod, EVP of Regulatory Operations at FINRA, shared that the industry is addressing this concern by hiring more people with tech backgrounds that understand the technology and risk analytics. Carlo DiFlorio, EVP of Risk and Strategy at FINRA, added that technology allows them to be more focused with the types of searches and surveillance that they can and need to do. Similar to the SEC, FINRA is now proactively scanning to identify new risks, new threats, and new ways to protect the market and consumers.

Also on the panel was Ben Indek, Partner at Morgan, Lewis, & Bockus, LLP, who shared the unfortunate truth that the industry perception continues to be this: if something goes wrong, everyone asks, “Where was compliance?” Often it is not compliance at fault, but instead a lack of surveillance tools to keep up with the quickly moving technology.

Time to revisit social media guidelines

At the “Social Media Emerging Issues, Innovation and Ongoing Challenges” session, industry compliance experts from Charles Schwab, Wells Fargo Advisors, and Fidelity Investments joined representatives from SIFMA and FINRA to discuss the current state of social adoption and challenges.

For FINRA, social networking continues to be in “retrospective review.”  The sweeps conducted last year were light on data to provide a full picture of social use and adoption in the industry. According to Tom Selman, EVP of Regulatory Policy at FINRA, of the the 23 firms they contacted, only 15 said they allowed registered representatives to use social media. Those firms that had allowed social were taking a very conservative approach towards adoption with very limited use of social platforms (mainly LinkedIn) and sharing of content. Of the 15 firms using social media, only one had any interactive activity to share. The relative sample was quite small with little interaction to comment on or regulate. All firms were using a third-party middleware provider to protect, monitor and supervise usage and to scrape social content for any infractions or red flags.

The biggest concern uncovered during the sweeps, according to FINRA, had to do with records maintenance and the ability of firms to reproduce easy-to-interpret records of social activity. For example, they described a submission from one firm that provided data in multiple different folders, including one folder with posts, one folder with images and a third that included the post with comments and responses. FINRA was challenged to tie these activities together for a complete picture of the social activity. In my opinion, the sweeps were unlikely to cover many gaps because firms under review were being very conservative in their approach towards social media.

To their credit, FINRA is considering reconvening the Social Networking Task Force that was instrumental back in 2009 in helping develop Regulatory Notice 10-06. According to Selman, the task force could help revisit the agency guidelines. I find this very encouraging, especially now that social has been available to the industry for nearly four years and the needle has only moved slightly in adoption, at least at the wirehouse level. Regulations do need to be updated and rewritten to reflect the current state of financial services and not an interpretation of existing rules that date back to the early part of the 20th century.

In conclusion, I am hopeful that FINRA, the SEC and SIFMA will continue to focus on technical advancements and take a proactive approach to address the needs of member firms and their clients. What is encouraging is that there is an understanding of both the threats and opportunities that technological advances present and that the industry is collaborating to address them.

Hearsay Social at the SIFMA Compliance and Legal Society Annual Seminar: Deaglan McEachern (@DeaglanM), Sanjiv Baxi (@SanjivBAXI), and Meagan Herfkens (@mherf).