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Social media lessons for networks from across the pond

Unless networks and national firms get to grips with social media there will be a repeat of the exodus seen by large US firms


We may joke about our US neighbours not understanding cricket or football but when it comes to social media technology, it strikes me that there is a great deal we can learn from our US counterparts.

Speaking at a recent adviser conference on social media, I was once again dismayed at the polarity of reactions displayed by advisers, usually correlated to their status. Directly regulated firms left super-enthused and positive but network and national members, albeit initially excited by the topic, ended up frustrated and disillusioned when they realised the compliance connotations.

As social media is one of the most accessible and cost-effective forms of promotional activity available to advisers, it strikes me that there surely has to be a way to correct this imbalance. The current situation is not only resulting in advisers leaving networks but also putting a burden and anxiety in to the network model that frankly seems unnecessary.

Perhaps it is about time that we looked for guidance across the pond – which Money Marketing technology columnist Ian McKenna has often cited as being a territory with enormous technological advancement.   

Simple research reveals the US understanding and appreciation of social media compliance is already considerably more advanced and maturely managed than anything we have yet seen in the UK. And while the regulations are more comprehensive, the attitude to social media usage is far more open-minded and pro-active. Most importantly, despite the much larger comparative numbers of advisers and volume of social media based communications, the number of social media related regulatory reprimands is less than a handful.

Like the FCA here, US regulators such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority also laid down rules in 2010 governing the use of social media. Unlike in the UK, however, these rules went much further and laid out not just how firms should use social media to communicate but how firms would have to be vigilant with record-keeping – retaining copies of every business-related social media tweet, status update or indeed any online content that a firm uses.

In August 2011, FINRA’s regulatory notice 11-39 put the focus on technology as it became obvious that mandatory record-keeping of all social media messages – to be retained for up to three years – would present a huge challenge for many adviser firms. In particular, the big ‘parent’ distributors – similar to our UK network and national models.

At present in the UK most networks and nationals have their own social media policy requiring that each member firm or adviser under their regulatory control should submit business-related social media profiles, messages and social media updates or tweets to a central compliance unit for approval. 

Of course some networks’ policies are more onerous than others. But virtually without exception the process is ultimately a manual one, relying on every member of every network to submit every single profile, tweet or status update which may require compliance approval before they can go ahead and post it live.

Imagine a network with several hundred firms having to vet all these emails, respond to them, record them manually in a database and do all this quickly enough that the messages are not completely out of date and useless by the time this process has been completed.

The burden on the network is great and sadly often driven by fear of the unknown, overly onerous and draconian. Is it any wonder that advisers with vision who feel passionately about the benefits social media brings are already responding with their feet.

In the UK keeping audits of social media data is not yet mandatory, but judging by the sweaty brows of many compliance officers and the anxious expressions of some network directors when social media is mentioned, the situation is likely to get a lot worse before it gets better.  

It is hardly surprising that the evolution of compliance technology began in the US with the banking sector as regulators became consumed with online fraud, phishing and cloned websites causing many private investors to suffer losses.

Companies like Trinovus – now part of Temenos – realised early on that there was a gap in the market for an automated social media management tool.

Trinovus’s decision in May 2012 to launch Social Comply – essentially an aggregator and management tool for social media content – proved an exceptionally timely one. The regulations which began in banking were then essentially extended to wealth managers, registered investment advisers and financial planners across the continent.

With over 900 firms already using the solution in the US it is clear that there is a good argument for something similar to be deployed in the UK, particularly if it can lessen the compliance burden while allowing advisers to have more freedom to exploit the benefits of social media.

Fortunately, there are UK advisers who are already gaining knowledge from our US counterparts. Pete Matthew, an established leader in the use of online marketing with his own adviser business, was kind enough to put me in touch with Blane Warrene, senior vice president of customer communications at RegEd, whose wise words gave me a fascinating insight into the key issues and potential solutions.

Back in 2009, Warrene formed Arkovi, a social media archiving platform subsequently acquired by RegEd in October 2012. From what Blane says, the success of Arkovi has been in helping the equivalents to our networks manage vast quantities of social media data across multiple firms in an automated and easily manageable way.  

Rather than having to approve social media messages individually by email, the technology allows just one user at a central point to have remote or dual-control access to one-window viewing of all communications needing approval.

Once set up to meet your firm’s guidelines, social media messages are logged, queued and can be viewed on their respective social media platforms with just one click and no need for any passwords.

Automated messages are relayed to hundreds of users in real time, allowing a major bank or financial institution to control every aspect of their social media messaging on a huge scale but with minimal human resource. Importantly, if the regulator visits the entire activity report can be viewed on demand.  

When we spoke about the topic of networks and social media policies in the UK, Blane described the ‘exodus of break-away brokers’ in the US which resulted from the lack of ‘digital freedom’ as a real crisis point for firms like Morgan Stanley, UBS and Merrill Lynch. He said they all lost large numbers of advisers as a result of overly onerous social media policies which simply drove firms away.

FCA rules for social media compliance

The last update on social media was issued by the FSA back in June 2010.

The guidance covers communications over social networking sites, such as Twitter and Facebook, as well as forums, blogs and smartphone applications.

The guidance covers all communications, not just financial promotions, and advisers are warned that communications via social media can not automatically be assumed to be image advertisements and therefore outside the financial promotion rules.

The guidance suggests that advisers should be particularly aware of four points:

  • New media may date more quickly than traditional media channels, so regular reviews to ensure that information is up-to-date may be required.
  • It is important to consider whether this channel is a suitable method for the type of communication. For example, Twitter limits the number of characters that can be used, which may be insufficient to provide balanced and sufficient information. 
  • It is important to consider whether the risk information could be displayed prominently and clearly using this media channel. 
  • Promotions and communications made using new media must meet the requirements for stand-alone compliance.

Nicola Mitchell is managing director at Mitchell Moneypenny


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Excellent and informative article Nic, which sheds some useful light on social media compliance

  2. Good article – thanks Nic.

    The sad thing is that if there are STILL national, network or even individual adviser firms who are yet to embrace social media, then they will probably never get it.

    People often still describe this as ‘new’ media or ‘new’ technology. It isn’t.

    Social Media was around long before Facebook, Twitter and even LinkedIn were even thought of. The first business networking site was founded in 1998; 15 years ago. Are there really still adviser firms thinking about whether this is something they should look closer at?

    And there really isn’t any need for “…social media messages to be logged and queued” on fancy monitoring software. The rules which more open minded firms give to advisers tend to look like this:

    1. Use Social Media for networking, listening, learning and sharing value
    2. Avoid financial promotions on Social Media (or have them compliance checked in the usual way for any financial promotion)
    3. Don’t give financial advice on Social Media

    They will then ask advisers for a random sample of tweets, posts and other Social Media posts at normal/regular compliance meetings. But most importantly. all of it is underpinned by robust training on Social Media for their advisers. What to do, what not to do, the firm’s Social strategy etc etc.

    Communication skills (online and offline) are critical to the success, image and reputation of the financial advice profession. Why oh why are we taking so long to embrace a technology that is here to stay and which is profoundly influencing how he profession is perceived?


  3. Well said, Nic. Social media, like all forms of engagement, requires a commitment. Of time of course, but just thinking about what is important to your audience.
    If you can’t be arsed to do it, don’t bother, as you will only ever do it badly.
    But the level of compliance you describe is unnecessary. Surely, these are professionals who in many cases are regulated and know where the boundaries are.
    Providing them with a sensible internal policy should give them all they need to be able to use social media.
    If, however, every word needs to be ratified by a compliance wonk, then they’re no use as a spokesman, and the company is wasting your time and theirs.
    It’s every bit as useless as having a spokesman speak to the media and then insisting all their quotes are checked before they publication.

  4. For those of you who know me it won’t come as a surprise that I am a dissenting voice.

    1. When it comes to ‘lessons’ from the US. It should be realised (for those of you who have any direct knowledge of that interesting place). That it is huge and desperate and apart from very small pockets a very different place and culture to anything European. (Ihave even encountered language difficulties). Indeed on first acquaintance it is not difficult to come to the conclusion that the majority are very dumb indeed. It isn’t so, but for such two different cultures it can often appear so. So what works there is not automatically a given that it will work here.

    2. That social networks can work for some is probably true. But what is also true and well proven is that it can also be pernicious and even evil. So this is something that could have a very nasty bite if not handled with kid gloves.

    3. Not everyone needs to get ‘out there’ to attract business. Indeed for some the idea of attracting potential clients ‘off the street’ is most unappealing. What it does for your risk profile having unfiltered people in your office is an issue not fully addressed by many.

    I concede it is also probably an age thing. But then my age group were better educated, more rounded, more confident with a better work ethic than many who have followed, so perhaps we have less need of this.

    Oh and before anyone decides that it is technophobia – think again. Without blowing my own trumpet I know my technology capabilities are comfortably above average. The amount of technology I use daily I would contend is second to none.

  5. Yea we get it, Harry. You’re not a fan.

  6. Great article Nicola.

    UK firms are well behind the curve in adopting social media effectively compared to their US counterparts. This is in part due to the current regulations; where FINRA and the SEC have been prescriptive of the compliance requirements, the FSA guidance note in 2010 was subjective to say the least. Most compliance officers will err on the side of caution to avoid any unnecessary scrutiny. When I spoke with the FSA after publishing their guidance note, there were no plans to provide further clarity or regulation. With the FCA now in place, I would expect this to be addressed in some form and for them to follow a stance similar to the US regulators.

    As per Philips comments above, the benefits of social media for financial firms outweigh the perceived risks if approached with common sense. Financial firms should be adopting social media strategically and remember that this is not just another distribution channel but should be a complement to their existing marketing strategy. Social media should be used as a medium to enhance the firms brand, be perceived as thought leaders among peers, provide enhanced client service and develop relationships and networks to help promote /achieve its business goals.

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  8. social marketing 23rd August 2013 at 8:34 pm

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  9. @ John

    Indeed not. But someone has to put a contrary view. Because of the incessant coverage people are being bludgeoned into believing that it is an indispensable part of modern life – which it certainly is not.

    From my perspective it is just another manifestation of the inexorable decline to ever more dumbing down.

  10. Bridget Greenwood 29th August 2013 at 7:02 am

    It’s worth noting that as more companies (financial and other sectors that are regulated or indeed extremely concerned about brand reputation) adopt social media there are becoming more tools that are being offered on the market place that solve these compliant issues.

    SMC4 is another tool recently on the market. Hootsuite and Actiance offer solutions. While these are more geared towards Enterprise clients, RegEd and others do cater for the smaller firm.

    Put simply while there is a lot to consider when using social media, there is a solution out there to your problem.

    As to the benefits – then you might be interested in this article about Morgan Stanley’s advisers. A $70 million case landed through LinkedIn. It might be an exception, some say the adviser got lucky. But I’m pretty sure that creating your own luck has something to do with putting yourself in the right place at the right time and recognising an opportunity.!

  11. Interesting article and a reflection of many industries in the UK. The big move in social media in the United States is on to mobiles and embracing video content.
    We at Vumanity have developed and patented a technology that allows the recording of content and editing into a “news” type format simply using iPhones or iPads.
    This allows the creation of relevant and timely content at a fraction of the cost of traditional video content.
    Clients can then email the content, upload it onto their website to boost SEO and upload to other social media outlets such as facebook and Twitter.
    This technology will be launched in the United States later this year followed by the UK

    Feel free to contact me at if you are interested.

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