Now that bank industry regulators have finalized their guidance on approved uses of social media, some institutions are finally—and very cautiously—letting their financial advisers use social networks to communicate with customers.
ING U.S. is a case in point. It recently gave a small group of financial advisers permission to interact with customers on Facebook and LinkedIn, where a congratulatory note on a family milestone, for example, might open an opportunity to sell a new investment product. But it's using software to help make sure employees stay compliant with the new rules.
"Our strategy is, if there's new technology and consumers will be using it, we want to understand how it works and how we can or should participate," says Ann B. Glover, chief marketing officer at ING U.S.
Financial firms can use social media in many ways: to promote their brands, to market community projects, or to handle customer complaints, for example.
But the Financial Industry Regulatory Authority and Federal Financial Institutions Examination Council placed some restrictions on these activities, largely to enforce existing consumer protection laws, such as Truth in Lending.
Glover's group started with social media in decidedly noncontroversial ways, to show the organization that there was a role for social media and that it could be used safely. When ING sponsored a series of marathons in Miami, New York and Hartford, Conn., it built Facebook communities for runners—a safe topic for the bank. That positive experience made it possible for the marketing team to convince management to experiment with social media in a business context.
As part of the learning experience, ING is sponsoring the "orange room" digital studio on NBC's "Today" show, where Carson Daly shares viewers' tweets and sometimes engages them in conversations about retirement.
"We're doing that to show that consumers want to know about this information and that we can help participate in those conversations," Glover says.
ING has been running a pilot with 10 representatives and plans to expand the group to 100 this year. The eventual goal is to involve all 2,400 financial advisers.
Many of the required compliance steps, such as monitoring and archiving all posts generated by employees, would be difficult to do manually. ING's experience with social media compliance software is an example of one way to avoid the time burdens.
Building the necessary guardrails for ING U.S. has been the job of Socialware, a vendor. Similar to software from Hearsay Social, Nexgate, Actiance, Finect and Gremln, Socialware's technology archives social media posts and monitors posts for words and phrases that could potentially violate rules.
Socialware also can block certain features on social media networks that a company may not allow. For instance, a "like" in Facebook can be perceived as a specific recommendation of a person, service or product. The same is true for some retweets and sharing of content that has not been preapproved. Similarly, FINRA considers a financial adviser's social media profile to be a static advertisement that must be reviewed for accuracy by a compliance officer.
"Most of the firms we work with don't want advisers to give endorsements because they inadvertently endorse a product when they didn't intend to do so," says Bruce Milne, Socialware's chief marketing officer. "We've found that most registered reps do want to comply; they just don't know what the rules are or how to."
An ING user passes through Socialware to get to LinkedIn. The software grays out certain features, such as the "like" button. It lets advisers post documents from a library of approved content, see how their content is doing, and view information about people who are engaging with them online.
Socialware uses lexicons to hunt down words that should never be used by a financial adviser, such as "free" and "guarantee," and flags them for a compliance review.
So far, the ING reps are permitted to use only LinkedIn and Facebook.
"We're encouraging and coaching them to use those two avenues to build deeper relationships with their current clients," Glover says.
And social media may help ING with its next big marketing challenge: getting customers accustomed to its brand change to Voya Financial later this year.
Some in the industry still wonder if clients want their financial advisers following them in social networks. But Glover has no doubts.
"We know that our financial advisers who are very successful do have deep relationships with their clients and help them manage their money," she says. "I think these barriers are coming down."