The document summarizes a presentation on using social media in wealth management while complying with regulations. It discusses why firms are using social media for marketing, recruitment, and research. It outlines a social media maturity curve and provides case studies of firms that successfully used LinkedIn and Twitter. It also reviews the regulatory landscape from FINRA, SEC, and IIROC and provides best practices for risk mitigation including policies, supervision, and record keeping.

1. Business Development Institute
Social Media in Wealth Management
February 23, 2012
Joanna Belbey
Social Media and Compliance Specialist
http://linkedin.com/in/belbey
www.facebook.com/#!/joanna.belbey
Twitter: @belbey

2. Why are we presenting to you today?
Joanna Belbey
Social Media and Compliance Specialist
FINRA Education Department
Running training firm
I help firms use social media while complying with the regulations
Twitter: @belbey, @actiance
LinkedIn: http://www.linkedin.com/in/belbey
My biggest challenge?

3. About Actiance, Inc
A decade of expertise, a history of firsts
Global Operations
• 3 US offices, three continents
• 210 employees
Dedicated Social Engagement Team
• Partnering: networks, platforms, service providers
• Regulators: FINRA, IIROC, FSA, SEBI…
• Best Practice enablement, education
Client Engagement
• 9 out of the top 10 US Banks, Top 5 CDN Banks
• 284 FINRA firms
• 82,000 Social Networking users under license

4. Agenda
Introductions
Changing landscape
Social Media Maturity Curve
Early successes
Regulatory landscape
9 things you can do to get started
Materials

7. So who’s using Social Media? And Why?
 Sales & Marketing
 Promotions
 Advertising
 Branding
 Financial Advisors / Producers
 HR
 Background checks
 Recruiting
 Scientists & Researchers
 Information exchange
 Collaboration
 IT
 Investigation of security breaches

8. Social Media Maturity Curve
Early Majority
Early Adopters • Corporate social presence
• Corporate presence • Social media usage
Early Consideration
• Acceptable use policy by distributed teams
• Some corporate advisors
• Social media being
presence
used by distributed • Acceptable use policy
Pre-Consideration • Banned/ restrictive teams/advisors • Next: use social
policy in place
• No social presence • Next: use social to to develop, strengthen
• Pilot program for develop, strengthen relationships, for some
• Restrictive social
content distribution relationships, for also as a sales channel
policy
may be in place some also as a sales
• No social tools • Previous concerns
• Next: justify channel about FINRA and/ or
• Need to: identify distributed teams impact of social media
options, best practices usage overcome by market
acceptance and
demonstrable results.

9. Case Study: Raymond James
1000 FAs in 3 weeks

10. Case Study: RW Baird
Outline Real Results
LinkedIn already available to 1200 @MaryS_rwbaird
Veteran advisers, tech savvy – 51 followers
Authentic content – 96 Tweets
– $1m prospect

11. Case Study: Wealth Management Firm (NJ)
Outline Real Results
LinkedIn only LinkedIn connection retirement
status change = $2.75m account
Listening is key, watching
acquisition
connections who matter
– Job change noticed on Status
Using social as an integral element
Update = 401k roll over
of communications mix to spot
change – FA obtains 400 new prospects in
Energy market
– New commercial account
opportunity through colleagues’
LinkedIn Connections

12. e

13. Risks of Using Social Media and Web 2.0
Data Leakage Incoming Threats Compliance & eDiscovery User Behavior
Personal SEC, FINRA Employee
Information Malware, Spyware Productivity
HIPAA, FISMA
Intellectual Property Viruses, Trojans Bandwidth
SOX, PCI, FSA
Credit Card, Explosion
Inappropriate
SSN FRCP- eDiscovery
Content Every employee is
Client Records FERC, NERC the face of business

14. Overview of Regulation & Compliance

15. Types of financial advisors
Registered Representatives Investment Advisors
(Broker-Dealer)* (Registered Investment Advisor)*
Regulated by FINRA and the SEC Regulated by SEC or state regulators
Paid via commission Paid fee by client
Suitability- recommendations must be Fiduciary responsibility – must place clients
consistent with best interest of clients interests above own
Ethics Legality
Transactions Advice
*Dually registered firms must adhere to both SEC and FINRA rules.

16. Financial Industry Regulatory Authority (FINRA) Regulatory
Guidance 10-06, 11-39
Rule Description Best Practice
Recordkeeping Capture, save and make Third party vendor(s).
easily available, all written
business correspondence
Suitability Recommendations must be Prohibit recommending
suitable for each investor specific products
Communications with the Content standards Disable the ability to make
public recommendations
Advertising Static v. interactive Pre-approval, post-review
Adoption and entanglement Third Party Content Retweeting, “liking” blocked
Supervision Demonstrate adherence with Follow risk-based written
content standards supervisory procedures

17. The Securities Exchange Commission (SEC) National
Examination Alert
Guidance Description Best Practice
Factors to consider for Identify risks Consider pre-review of all
effective compliance program content posted by IAS
Third Party Content Possibly testimonials May need to re-evaluate
separate professional pages
Recordkeeping (Advisers Act) Capture, save and make Third party vendors
easily available, all written
business correspondence

18. IIROC Guidelines
Regulation Social Media and Web 2.0 Impact
Provides guidance on recordkeeping, suitability, supervision, and retention of sales
11-0349 literature, advertisements, and correspondence
Rule 29.1 Anonymous representations or recommendations are improper.
Rule 29.7 (1) Advertising and sales literature shall not be false or misleading.
Written policies and procedures shall be in place regarding the review and
Rule 29.7 (2) supervision of sales literature related to the business.
Rule 29.7 (3) Some types of sales literature must be pre-approved by a supervisor.
Recordkeeping requirements - two years for advertisements and five years for all
Rule 29.7 (5) correspondence
National Instrument 31-103 Firms must retain records of all their business activities and communications.

19. So, what’s a tweet?
Pg. 18

20. Regulators and Social Media
FINRA: RR Jenny Ta used Twitter to tout stock. Ta’s “tweets” were
unbalanced, overwhelmingly positive and frequently predicted
increases. Fined $10K and suspended for one year.
SEC Division of Enforcement: Alleges that Anthony Fields of Lyons IL
offered more than $500 billion in fictitious securities through various
social media sites.
FINRA exams: lists of RR using social media, checking against social
media policy

21. What can you easily do to mitigate risks
1. Understand your firms landscape, get visibility.
2. Engage stakeholders in policy setting. Set the policy.
3. Consider and address the risks, in a granular fashion.
4. Protect your network from malware, phishing, attacks, data leakage
5. Issue and implement best practice guidelines.
6. Understand and manage the fallibility of human beings.
7. Record and retain (appropriate) communications.
8. Provide education for your users on acceptable and appropriate use.
9. Review and refine policies (regularly).

22. To infinity….. And beyond..

23. Contact Information
info@actiance.com
@Actiance, @belbey
Further reading:
Marketers Guide to Social Media in Financial
Services
FINRA 10-06 and11-39 requirements mapped
to Facebook, LinkedIn, and Twitter features
Social Media Handbook
Osterman Research:
The Impact of New Communication Tools for
Financial Services Firms
Actiance Collateral Library
http://actiance.com/products/collateral-
library.aspx

24. Thank you
Joanna Belbey
Social Media and Compliance Specialist
http://www.linkedin.com/in/belbey
@belbey
Confidential and Proprietary © 2012, Actiance, Inc.
All rights reserved. Actiance and the Actiance logo are trademarks of Actiance, Inc