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Social media compliance, a small but growing sector in the advisory economy

Things are going well in at least one little nook of the digital economy these days: The e-mail…

Things are going well in at least one little nook of the digital economy these days: The e-mail and social media archiving and compliance technology business or ESMACT (sorry, I took the liberty of creating my own acronym).
Among purveyors of this sort of tech, business seems to be brisk at Erado Message Control Solutions, which has made two small announcements in as many days.
First, today the company announced that it planned to hire 30 more employees next year in the areas of tech support, customer service, accounting, administration, and web development.
The firm also has a new partnership afoot with Quest CE, the financial services compliance and compliance training firm, which was announced Wednesday.
Erado’s archiving system will be added to or integrated in some fashion with Quest CE’s turnkey compliance package called Codex.
Erado’s systems monitor, track and archive the social media traffic of advisers carried on the current big three social networks: LinkedIn, Facebook and Twitter.
I’m terribly oversimplifying things but as a simple nutshell refresher, on the social media front Erado aggregates all that traffic and sweeps it up and into a database for retention (and analysis) along with a firm’s e-mail (Erado has been doing the latter for many years).
As Craig Brauff, chief executive of Erado points out in his prepared statement: “We are just now starting to see the financial services industry begin to use social networking sites. Once you decide to move into social media, you need to get compliance involved, and compliance concerns are real. FINRA’s regulatory notice 11-39 requires diligent capture, record keeping and supervision of social media content.”
The need for more staff stems in large measure from the firm’s client growth the last year and a half.
Many of these new customers are from the independent broker-dealer space.
In many cases Erado has been brought in as vendor of choice for carrying out a firm’s capture of social media content or in some cases they have simply made the approved list (that was the case with LPL Financial in June).
Most recently Erado landed an exclusive multi-year agreement to provide social media compliance services to Investacorp, Inc., an independent broker-dealer subsidiary of Ladenburg Thalmann Financial Services Inc.
In July, Erado landed the business of National Planning Holdings Inc. 3,500 affiliated representatives spread among four broker-dealers: Invest Financial Corp., Investment Centers of America Inc., National Planning Corp., and SII Investments, Inc.
Commonwealth Financial Network said in June that they would begin using Erado.
And in case anyone else is trying to keep a tally (I’m trying to keep a sense of who is using what) they are also working with Liberty Partners Financial Services, LLC, Jeffrey Matthews Financial Group, LLC, Protected Investors of America, Inc., LaSalle Street Securities, LLC, Financial Management Network, Inc., Summit Brokerage Services, Inc., and JW Cole Financial, Inc.
Whew!
That is not to say that other vendors have been slacking.
Why just last month Raymond James Financial Inc. signed on with Actiance Inc. for use of its Socialite platform with RJ’s 1,500 employee advisers and roughly 3,300 affiliated independent advisers.
Actiance is a proxy-based system, meaning it has to be running on the device an adviser is publishing his or her social media from.
I have been remiss in not checking in of late with two other players in this space that I have watched since they rolled out.
The first, Arkovi developer BMRW & Associates Inc. has been busy this year as well, having landed many new clients at various types of firms and forming partnerships.
Chief executive Blane Warrene actively maintains Arkovi’s blog but I have not been as punctilious about keeping up reading it. I did find today’s post on Arkovi’s tracking of tweet sources very interseting, along with the data they shared.
Similarly, I ran into Socialware chief executive Chad Bockius at the SIFMA technology show but am in need of an update with them as well.