Technology Update

Behind the scenes in social media

Tools are being offered to keep up with what regulators develop

May 15, 2011 @ 12:01 am

By Davis D. Janowski

As regulators take their own sweet time coming up with guidelines for social media, the marketplace is coming up with its own solutions for financial advisers.

Providers of archiving and compliance systems, for instance, are developing new ways to capture adviser-generated content on major social networks such as Facebook, LinkedIn and Twitter.

Just last week, popular e-mail archiving company Smarsh said that it had entered a partnership with Actiance Inc. for the use of that firm's Socialite product, which provides security, management and compliance solutions for social networks.

Actiance last month announced access to LinkedIn's application-programming interface.

The developments mean that financial services firms worried about granting their employees or affiliated representatives access to LinkedIn now have at least a partial solution.

By using Socialite, those firms and their affiliated reps can control use of more than 150 feature and content controls of LinkedIn. It will allow businesses to set custom policies that meet the regulatory requirements of the Financial Industry Regulatory Authority Inc.

What's more, Socialite extends compliance on LinkedIn to employees' use from home, as well, because they log in to Socialite to access LinkedIn. (The same is true for access to Facebook and Twitter.)

There are several other important partnerships in this regard.

Last fall, MailBanc, a subsidiary of Market Counsel LLC, formed a strategic partnership with Arkovi developer BMRW & Associates Inc. MailBanc is the reseller of MessageWatcher LLC's e-mail archiving and compliance system to broker-dealers and registered investment adviser firms.

The partnership provides advisers with a comprehensive archiving service that covers e-mail, social media and instant messaging.

Just last week, Commonwealth Financial Network officially signed on to use the services of another provider, Erado, for the capture, post-review and retention of social-media use among its advisers.

Erado's technology is account-specific and allows Commonwealth to collect an adviser's social-networking traffic whenever he or she logs in, no matter the device or location.

It does this by using the application-programming interface provided by the major social-media applications. Media traffic is converted to e-mail format and passed along to Commonwealth's communications surveillance tool and then to the broker-dealer's compliance review team.


Although not yet aimed specifically at advisers, on the horizon are multitudinous social-media startups aimed at smaller groups or for forming small groups within Facebook.

A recent article in The New York Times named a bunch of these firms, including Bubbla, Frenzy, GroupMe, Huddl, Path, Rally Up and Shizzlr. There are, however, dozens of others and probably many more that are in stealth mode.


Although these could have potential for advisers in terms of client prospecting, they also may prove disruptive for compliance technology providers and regulators. That could add to the argument that social networking is better left unused by the advisory community — or at least restricted.

Be that as it may, I would like to focus on two applications that are representative of the new paradigm: Path ( and GroupMe (from Mindless Dribble Inc.,

The first thing to keep in mind is that these two programs were launched as smart-phone applications running on iPhone. GroupMe ran on the Android and BlackBerry operating systems, as well.

Path, which was launched in November, already has about 57,000 active users and integrates with Facebook. It permits users to share text, photos and brief videos with up to 50 people, who can return the favor as well. That number may be expanded to 150. This content can be shared via iPhone, or sent to e-mail, to the web or directly to Facebook.

GroupMe is a free group-texting and conference-calling application. The provider said, “It's sort of like a private chat room over SMS, or reply-all text messaging. When you start a GroupMe, we give it a unique phone number. When you send a text message to a GroupMe number, that message is sent instantly to everyone in the group.”

For advisers, consider how these types of applications could be used with clients in a collaborative, positive way. Now imagine how a bad guy could take advantage of these applications — not to mention the challenges inherent in tracking them.

I am just giving you food for thought.

Social Media & Networking (control, compliance, archiving technology vendors for advisory firms/broker-dealers):

Related stories:

Finra unveils guidelines for social media and blogging (Jan 25 2010)

Social-media archiving, compliance solutions in focus

Use of social media in focus SEC begins sweep, Finra mulls issuing new guidance for advisers

Social Media: Reps, advisers experiment despite compliance concerns (webcast transcript)

Social media archiving meets e-mail archiving in new partnership

FaceTime launches security app for social networks

Small surveys reveal different points of view on advisers and social networking

Making the most of social networking

Advisers approach Google's Buzz with caution

Socialware could bring B-Ds, large RIA firms into the modern world

Arkovi, hope for advisers who want to tweet – but not delete

E-mail Davis D. Janowski at


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