Why financial advisors need strong social media policy, tools

September 09, 2015 by Jatheon

Why financial advisors need strong social media policy, tools

The financial industry has some of the most stringent laws and regulations of any segment of the economy, with retention of communication records and related forms of unstructured data a major consideration. The advent of digital communications started with email, and many organizations in the financial world have found compliant solutions for archiving this specific type of data.

However, an archiving and monitoring strategy that begins and ends with just a single form of digital communication no longer matches up with the reality of day-to-day operations for the majority of businesses in the financial world. Many other types of unstructured data need to be archived, with social media posts one of the most pressing needs.

“The openness and interactivity of social media make it a unique element in terms of regulatory needs in the financial industry.”

The power of social
While social media does very little if anything to help the business make financial decisions, it’s invaluable for marketing, customer engagement and many other support roles that involve attracting and retaining clients. Social media, when done right, provides a type of connection and a space for conversation that’s hard to match through any other marketing channel. Marketing analysts and experts routinely cite social as a critical method for outreach, and statistics tend to back up those assertions. Marketing Land highlighted research from technology analytics company Neustar, which ranked social as the most effective channel in the first quarter of 2014. Additionally, social has either taken the top spot in marketing channel effectiveness rankings or remained in contention since that report was issued.

The unique element of social, the one that makes it stand out among many other efforts to interact with consumers, is the two-way nature of communication. While not all questions can or should be answered via a tweet or Facebook post, there’s plenty of general and even some specific information about the world of finance that is effectively shared through social networks. However, the openness and interactivity of social media make it a unique element in terms of regulatory needs in the financial industry, and many rules related to compliant storage of communications apply to conversations had and individual posts made on those networks.

How does an archiving and monitoring solution help?
Depending on the type of services provided and the jurisdictions it operates in, a company has to follow a wide variety of regulations related to communication storage. A business in the U.S. has to comply with everything from Sarbanes-Oxley and Dodd-Frank to regulations imposed by the U.S. Securities and Exchange Commission and the Federal Financial Institutions Examination Council.

Many of these industry rules involve the archiving of all or nearly all client communication data in a compliant format for a set period of time. With an effective and wide-ranging solution, compliance needs are met and companies in the financial industry can have confidence should an audit be initiated or a legal need for the documentation arise. So what makes up a complete unstructured data archiving and monitoring tool for the financial industry?

  • Customization of relevant system rules: A solution should allow adjustments based on the specific sets of regulations followed.
  • Compliant format storage: If archives aren’t maintained in the right format, they aren’t complaint.
  • Powerful search: Strong search capabilities make finding the right pieces of information simple tasks.
  • Monitoring, flagging and audit trail capabilities: Monitoring and related rules stop employees from posting information that violates internal policies and relevant laws. Flagging lets administrators know when such posts are caught by the solution. Audit trails document steps taken to deal with such posts.
  • Long-term retention capability: Records must be retained for at least a few years in nearly all instances, and sometimes that period is considerably longer.
  • Legal holds: The ability to institute holds is invaluable in terms of compliance with legal needs like eDiscovery.

This list of attributes includes many, but not all, of the functionalities needed for an effective social media archiving solution in the financial world.

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