As presented by Jared Licklider to the attendees of the IFCA Annual Conference Nashville, TN October 4, 2011.

1. The State of Social Media in Financial Services
Jared Licklider, Senior Analyst
DALBAR, Inc.

2. Overview
ØRegulations and policies regarding social
media
ØAnalysis of social media use for financial
service firms
ØExamples of social media use on
financial service websites
ØConsiderations for using social media
now and in the future
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3. Why Social Media?
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4. Why Social Media?
Ø Social media sites and blogs account for 23% of Americans’ time spent
online
Ø Women 18-34 years old are most active users or social networks and
blogs
Ø Americans 35-49 comprise 27% of the social media audience and are
4% more likely to visit a social network or blog than the average Web
user
Ø Facebook had 140 million visitors during May 2011 and reached 70%
of active U.S. Internet users
Ø 53% of active social networking users follow a brand!
Ø 70% of active adult social networking users shop online, 12% more
than the average adult Internet user!
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Nielsen – The Social Media Report Q3 2011
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5. Regulations
Ø NASD Rule 2210
Ø FINRA Regulatory Notice 10-06
Ø FINRA Regulatory Notice 11-39
Ø SEC Rule 17a-4
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6. NASD Rule 2210
Ø An email or instant message sent to 25 or more prospective retail
customers is sales literature.
Ø An email or instant message sent to a single prospective or current
customer, or an email or instant message sent to an unlimited number
of current clients and/or less than 25 prospective retail customers
across an entire firm within a 30-day period, is considered
correspondence.
Ø Password-protected sites are sales literature.
Ø Real-time interactive electronic forums and chat rooms, non-static,
interactive components of social networking and blog comments are
considered public appearances.
Ø Publicly available websites, banner advertisements and bulletin boards
are advertisements. The non-interactive components of social media
websites, such as the firm background, history, profile, or wall
information, are also considered advertisements.
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7. Advertisements
Ø Non-interactive areas of a social media profile: firm’s
history, background, and wall information
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8. Public Appearances
Ø Real-time, non-static, interactive components of
social networking and blog comments
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9. FINRA Regulatory Notice 10-06
Ø Suitability regulations discussed in NASD Rule 2310 apply to
recommendations supplied through social media.
Ø No rule exists to limit which members of a firm are able to create a
social media account, however, training is required for those members
who wish to use social media for business purposes. Additionally, firms
should place restrictions on any member with a history of compliance
problems who wishes to use social media for business purposes.
Ø Third party posts to a social media website are not treated as a firm’s
communication with the public. However, issues arise when a firm
endorses a third party post, is involved in the preparation of a third
party post, or allows offensive or copyrighted content to be posted to
their social media site/page.
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10. FINRA Regulatory Notice 11-39
Ø Autobiographical information, such as place of employment and job
responsibilities, in certain contexts, could be a business communication.
Ø Interactive content can become static if it is used that way and would
fall under new rules.
Ø Since static content on social media sites is considered an
advertisement, then changes to that material must receive prior
approval.
Ø No using social media sites or devices that automatically erases or
deletes a communication.
Ø Recordkeeping responsibilities are not dependent on the device used to
make the communication or whether the device was issued by the firm
or is for personal use.
Ø Firms can allow the use of personal devices for business
communications but must be able to retain, retrieve and supervise
business communications no matter if the firm owns the device or not.
Ø Records of third party posts need to be kept.
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11. Internal Firm Policies
Ø Approving use of certain social media sites but not all.
Ø Employees are allowed to list their company and occupation on
personal pages.
Ø Employees are not allowed to post about their company on personal
pages.
Ø Only certain individuals within a firm are allowed to post to company
social media websites.
Ø Certain individuals, like financial representatives, are only allowed to
post pre-approved content.
Ø Compliance department will routinely audit firm and employee social
media pages.
Ø Requiring training for social media use.
Ø Some firms use webinars or training sessions. Some firms also test
social media users and require a passing score.
Ø Installation of recording/tracking software onto employee computers
that will be used for posting to and managing social media pages.
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12. Compliance
Ø Incorporate Compliance early in the process
Ø Familiarize Compliance with the sites and explain how
you plan to use it
Ø Train advisors, employees, and representatives
Ø Monitor sites and posts
Ø Archive social media interactions
Ø Involve Compliance but do not overburden them with
posts that may not need review
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13. Usage Guidelines
Ø Do not post personal or account information or request transactions.
Ø The firm is not responsible for the privacy and security of the social
media site or any third party sites linked to within posts or on the page.
Ø The firm is not responsible for content for other social media pages or
third party sites linked to within posts or on the page.
Ø The firm does not endorse posts or third party links or websites (or
advertisements usually found on the right hand side of the page on
Facebook).
Ø Do not post obscene, explicit, and/or offensive comments.
Ø Do not post recommendations for specific investing products.
Ø The firm will not respond to comments (this is not applicable to every
company and some are responding to basic customer service requests
and general posts from their followers/fans).
Ø The firm reserves the right to block users and delete posts they deem
inappropriate.
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14. Social Media Background
Ø The Big 4:
ü Facebook
ü Twitter
ü LinkedIn
ü YouTube
ü Others: Tumblr, Blogger, MySpace, Wordpress,
social bookmarking sites
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15. Social Media Background
Ø The Big 4:
ü Facebook - personal site, less-frequent posts,
profile pages for different promotions
ü Twitter – more frequent posts, pushing content,
driving traffic back to public website
ü LinkedIn – connecting professionals, finding
employees
ü YouTube – video content
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16. Social Media Background
Ø Link individuals to official social media pages
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17. Social Media Background
Ø Legg Mason
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18. Social Media – How is it Used?
Ø Fielding very basic customer service and
complaints
Ø Sharing educational, company, human
interest and market related articles
Ø Support company promotions, sponsorships
and events
Ø Connecting with financial professionals
Ø Blogs
Ø Prospecting for new talent
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19. Customer Service
Ø Nestlé
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20. Customer Service
Ø Complaints
Ø Website technical issues
Ø Widespread online/offline problems
Ø Policy/account/contract specific transactions
or problems
Ø Key detractors: authentication, written
authorization for certain transactions,
complex transactions, and possibility of
personal information becoming public
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21. Customer Service
Ø Complaints
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22. Customer Service
Ø Complaints
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23. Customer Service
Ø Complaints
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24. Customer Service
Ø Website technical issues
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25. Customer Service
Ø Website technical issues
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26. Customer Service
Ø Website technical issues
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27. Customer Service
Ø Widespread online/offline problems
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28. Customer Service
Ø Widespread online/offline problems
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29. Customer Service
Ø Policy/account/contract specific transactions
or problems
Ø Key detractors: authentication, written
authorization for certain transactions,
complex transactions, and possibility of
personal information becoming public
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30. Customer Service
Ø Provide contact options
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31. Customer Service
Ø Provide contact options
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32. Customer Service
Ø Direct Messaging (DM)
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33. Customer Service
Ø General non-confidential account questions
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34. Customer Service
Ø Reps providing posts
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35. Customer Service
Ø USAA
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36. Sharing Content
Ø Build brand recognition
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37. Sharing Content
Ø Types of content:
ü Human interest
ü Economic commentary
ü Educational articles/videos
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38. Sharing Content
Ø MassMutual
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39. Sharing Content
Ø MassMutual
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40. Sharing Content
Ø MassMutual
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41. Sharing Content
Ø Share icons on site
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42. Sharing Content
Ø Share icons on site
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43. Sharing Content
Ø Share toolbar – AXA Equitable
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44. Sharing Content
Ø Pushing content
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45. Sharing Content
Ø E-delivery and cost basis
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46. Sharing Content
Ø Social media feeds
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47. Sharing Content
Ø Advice
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48. Support Company Initiatives
Ø Sponsorships and partnerships
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49. Support Company Initiatives
Ø ING Runner’s Nation
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50. Support Company Initiatives
Ø Social media specific initiatives
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51. Support Company Initiatives
Ø Microsites
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52. Connect with Financial Professionals
Ø Advisor-specific Twitter
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53. Connect with Financial Professionals
Ø Find an advisor
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54. Blogs
Ø Commentary and articles
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55. Blogs
Ø Putnam
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56. Blogs
Ø Shutting off comments
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57. Prospecting for New Talent
Ø Actively searching
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58. Prospecting for New Talent
Ø Informing fans of opportunities
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59. Prospecting for New Talent
Ø Northwestern Mutual
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60. Prospecting for New Talent
Ø Career social media channels
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61. Considerations for the Future
Ø Using social media to sell
Ø Additional sites/enhancements
Ø Protocol
Ø Page Design
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62. Using Social Media to Sell
Ø Joining a conversation
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63. Using Social Media to Sell
Ø Listening to chatter
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64. Additional Sites and Enhancements
Ø Tumblr
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65. Additional Sites and Enhancements
Ø Google+
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66. Protocol
Ø Professionalism
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67. Protocol
Ø Checks and review
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68. Protocol
Ø Repetition
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69. Protocol
Ø Overkill
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70. Page Design
Ø Backgrounds
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71. Page Design
Ø Backgrounds
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72. Page Design
Ø Issues with Twitter
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73. Page Design
Ø Theme pages
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74. Page Design
Ø Profile pictures
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75. Page Design
Ø Profile pictures
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76. Conclusion
Questions?
For more information please contact:
Brooke Halloran
Bhalloran@dalbar.com
617-624-7273
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