Facebook's new Timeline interface serves as a potent reminder both to the registered investment advisory world and firms regulated by Finra that social networking is constantly evolving — and that their analytics, compliance and archiving technologies must keep pace.
The rollout of Timeline for businesses in March has resulted in a good bit of work for many social-media compliance experts and compliance officers, and caused many across the advisory industry to update Facebook pages and policies.
And it won't be a one-time occurrence.
“The challenge for our industry is keeping up with the reality that these social networks are constantly changing, updating and improving their features, and old ones will die and new ones will come on the scene,” said Stephanie Sammons, chief executive of Wired Advisor, which provides social-media marketing solutions and consulting to advisers.
Facebook's own explanation of Timeline is that it is “your collection of the photos, stories and experiences that tell your story.”
Basically, Timeline places content in date order, with the newest items at the top of the page.
Among other things, it allows users to add a “cover” to their “story,” edit basic information, quickly jump to the past, see highlights of their Facebook existence from each month at a glance and more easily highlight events that they want others to notice.
These changes present challenges to many firms.
“In general, I think that securities firms that allow Facebook are going to have to provide ongoing guidance when new features are available or they will find that the granular features may quickly land their firm out of compliance,” Art Metzger, vice president of advertising supervision at Advisor Group, wrote in an e-mail a few weeks ago.
Since then, he said, he's had meetings with advisory firms that have led him to worry even more.
“Firms with a set-and-forget approach to social media will likely not fare well in the long run,” Mr. Metzger wrote in a subsequent e-mail.
With all the available applications and new features available on Facebook, and the changes that the company is making, each advisory firm must stay vigilant regarding their policies and technology.
“Facebook usage represents an ongoing risk because of its lack of consideration for the [effects it] can have on all businesses, let alone” firms regulated by the Financial Industry Regulatory Authority Inc. and the Securities and Exchange Commission, said Patricia Allen, principal of consulting firm Rock The Boat Marketing LLC.
She stressed that Facebook remains a network intended for individuals, not companies, despite the overall corporate desire to make the best use of the network's popularity and the fact that many advisory firms have company pages.
Blane Warrene, chief executive of Arkovi Social Media Archiving, has been confronting the changes head-on at his firm, which, as its name suggests, archives content from many major networks for advisers.
“The positives are the new, more visual Timeline, which allows for clearer brand control on content,” he said. “The issues that have arisen for many firms are the new e-mail messaging that is available at the page level.”
Previously, Facebook Mail was available only for individuals, but the new feature makes correspondence available at an advisory firm's fan or business page.
Mr. Warrene and other experts contend that these enhancements will be less of an issue for RIAs, as they already are well-aware that testimonials are a no-no.
But the changes could be more problematic for broker-dealers because for those that allow Facebook usage, all page-level e-mail messaging will need to be supervised and archived like any other correspondence.
Additional controls that can help with this process have been created by Facebook, however. For example, users can turn off messaging on individual pages, set up moderation lists for blocking certain keywords and phrases posted by third parties, and block particular users.
“Clearly, archivers need to stay on top of [application programming interfaces]. We have a developer who is 100% focused on API monitoring and enhancements,” Mr. Warrene said.
Ms. Sammons suggests that firms focus their compliance energies on managing the way their employees interact on social networks, and not on the features of specific networks.
She pointed to Facebook's on-page “recommendations” feature, which was an issue prior to the Timeline change and continues to be.
“All you can do there is monitor your page daily and hide any recommendations. It won't stop the recommendations from appearing on the profile of the individual who published it, but at least you can prevent it from being public on your page,” Ms. Sammons said.
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