LinkedFA Offers Social Network For Financial Advisors - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Cloud // Cloud Storage
News
6/1/2011
04:38 PM
Connect Directly
LinkedIn
Google+
Twitter
RSS
E-Mail
50%
50%

LinkedFA Offers Social Network For Financial Advisors

Regulatory and compliance issues forced the company to install controls and features not available on consumer social networks.

Top 20 Apps For Managing Social Media
(click image for larger view)
Top 20 Apps For Managing Social Media
Frustrated by regulations that make it awkward for them to participate fully on social networks, some financial advisors are signing up for a network created specifically for them.

LinkedFA launched last year as a social network for advisors that would allow them to connect with each other without worrying that they will run afoul of regulations on financial advertising and communications that complicate the use of other social networks.

For example, under Financial Industry Regulatory Authority (FINRA) rules, a social network profile that includes an advisor's professional affiliation is treated as advertising, meaning that it is subject to a regulatory compliance review prior to publication. To use even a professionally oriented social network such as LinkedIn, a financial advisor has to carefully turn off features that most other professionals would welcome, such as the ability for clients to post endorsements to his or her profile. And even the most carefully worded status post could attract comments from another user that an advisor wouldn't want to be associated with.

The rules are actually more complicated than that, given that some financial professionals are governed by other sets of rules (or multiple sets of rules) depending on how they are licensed or who they work for. In general, the regulations on social media are nothing more than new interpretations of longstanding rules intended to prevent advisors from making exaggerated or deceptive claims, while requiring them to archive all written communications for regulatory review. Because of these complications, many financial advisors have been discouraged from actively using social networks in a professional capacity. Large firms have been particularly conservative on that front.

In a previous life as a broker dealer, LinkedFA President Jason Bishara said he watched the same pattern play out with a newfangled technology called email, when he wanted to use it to replace marketing media such as postcard mailers. "The corporate office said, 'You can't use it,'" he said.

Bishara eventually left his job at Global Capital Securities to start a company that created a Web-based system for sending out email marketing messages, based on templates that included all required disclaimers and a process for getting compliance review for messages prior to distribution. His company, SLM Holdings, eventually sold the product to contact management software maker ACT.

The ban on social media may be starting to crumble, following last week's Morgan Stanley announcement that it will begin allowing participation on LinkedIn and Twitter, with management, monitoring, and archiving services provided by Socialware.

Still, Bishara said he is skeptical of products that solve the compliance problems of public social networks. "You really can't--not yet," he said in an interview. "The other social network sites never let you open up their APIs wide enough to let you ensure compliance."

A LinkedFA user can avoid those issues because the service is specifically built around the concerns of this industry. In a LinkedFA activity stream, members can comment on each other's status updates, but the comments aren't published right away. The author of the original post will see the comments grayed out in his activity stream until he or she approves them for publication.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
ALOCSIN000
50%
50%
ALOCSIN000,
User Rank: Apprentice
7/16/2011 | 2:46:58 AM
re: LinkedFA Offers Social Network For Financial Advisors
Here is a great eBook which helps those in the financial services industry gain an understanding and get started with social media - 7 Steps to Social Media Success for Financial Advisors http://financialadvisorselfpro...
Commentary
Study Proposes 5 Primary Traits of Innovation Leaders
Joao-Pierre S. Ruth, Senior Writer,  11/8/2019
Slideshows
Top-Paying U.S. Cities for Data Scientists and Data Analysts
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/5/2019
Slideshows
10 Strategic Technology Trends for 2020
Jessica Davis, Senior Editor, Enterprise Apps,  11/1/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
Slideshows
Flash Poll