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WHAT THE FUTURE HOLUS

Clearly, different segments of the financial industry demonstrate wide differences in the degree to which they are embracing social media. But the involvement of individual advisors or firms will depend to a great extent on their ability to adapt to some of the changes already under way. As you or your firm look to use social media, what are some of the key things to watch for?

More communications to record – Whether you're a compliance officer or technology leader, you'll have to address the massive amounts of content that may require approval and will certainly require archiving.

More internal partnering – Firms that are successful work hand-in-hand with their compliance officers. Today's CCOs recognize they can't be gatelockers when the world is quickly moving ahead. Successful firms are working together to build a mutual understanding of the business case.

Increase in data collection – As new laws open up the doors to product marketing online and as investors adopt social interactions for decisionmaking, we can expect a greater opportunity to capture data. This could be data at the government level or even firm level – data that can be used to detect the next Bernie Madoff or ensure that investors are matched up with suitable products.

More regulatory direction – Reed Hastings, the CEO of Netflix, drew the SEC's attention in 2012 when he put up a Facebook post that referenced a big increase in the firm's streaming hours – an announcement that was promptly followed by a sharp jump in the stock's price. In the end, the SEC opted not to file charges against Hastings; instead, it said that disclosures on social media were appropriate as long as investors were alerted in advance to which channels on which they could expect to receive such information. We continue to see more timely comments from nearly all key agencies, and we also see then- presence at industry events, providing more proactive guidance perhaps than ever before. The SEC also made it plain that CEOs are always speaking for the firm when they speak about the firm. Hastings' tweets were attributable to his firm.

The financial industry has often felt hogtied and handcuffed by compliance issues in the past. The arrival of social media on the landscape – a gamechanging dynamic that both regulators and financial professionals are still getting their arms around – in many ways has exacerbated the tension wealth managers feel as they plan for business in the twenty-first century. And yet the history of the industry shows that it can, and does, adapt. The tools exist for the advisor who wants to move forward.

 
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