Last week, Morgan Stanley announced that it will begin letting its advisors use LinkedIn and Twitter, starting in June, making it the first large financial management firm to do so. Both Morgan Stanley and Guardian are working with Socialware, a social software vendor that specializes in providing the required monitoring, filtering, and archiving for compliance control. Based in New York City, Guardian is one of the largest mutual life insurance companies in the U.S.
Guardian's plan is to phase in access to social media, starting with the largest and most technically savvy producers and gradually broadening access to other more people. Part of the process will be training those who are granted access on acceptable communications and behavior for online media, and that training will be repeated as Guardian gains experience and revises its policies.
"We're just in the throes of launching this out in a big way," Guardian Chief Marketing Officer Steve Holstein said in an interview. "People for the most part in the insurance space are either in a contemplative state or just getting going." Until now, Guardian's agents were limited to having relatively static profiles on services such as LinkedIn, with the text pre-approved by the company's compliance department, and could not actively participate in online discussions, he said.
Because Guardian is primarily in the business of selling insurance rather than securities, its agents are not necessarily covered by the same Financial Industry Regulatory Authority rules as financial advsiors. FINRA's rules complicate participation in social media because they treat common activities like creating a profile or receiving an endorsement as advertising, subject to tight regulatory compliance review, and routine comments and status updates need to be archived as correspondence, just like email.
Because many agents are independent business people who also sell FINRA-regulated products, Guardian has elected to treat FINRA rules as best practices to be applied even where they are not necessarily required, Holstein said. "We're managing this medium, as best we can, in a singular fashion, and FINRA is best practice."
Socialware CEO Chad Bockius said consolidating the applicable rules is a practical necessity, given that financial professionals are often covered by 100 or more regulatory bodies, when state agencies are taken into account. "State regulators don't have as many resources, and they're not as quick to provide guidance, but every one of them is discussing the topic," he said.
Socialware manages social media participation using a combination of techniques, including proxying user connections to social media sites and using application programming interfaces to gain the access it requires to monitor and manage message and comment streams on sites like LinkedIn and Facebook. With that in place, Guardian representatives will still have to watch what they say online, but the company will have the security of knowing it can subject posts to pre-approval as necessary, monitor a user's overall participation on social sites, and archive messages it might have to later produce for regulatory review.
Holstein said compliance is at the top of his list of requirements by necessity, but finding an effective way to gain the advantages of social media is close behind. "My vantage point is this is a medium that is here, and it's only going to grow in proportion and prominence. It is slowly but surely hitting every industry." Now, Guardian hopes to be able to treat social media "as another medium, probably a more important medium, that's going to help us hire, help us prospect, and ultimately help us generate revenue. We still want to get face-to-face with our clients eventually, but this can be very complementary to that."
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