As financial services firms like Ameriprise Financial look to modernize and embrace social media, the Financial Industry Regulatory Agency is cracking down. Last month the group announced it was instituting spot checks of social media communications, starting with the top-producing advisers in the industry.
Ameriprise is proceeding with caution, though it's come a long way since spinning off from American Express in 2005. Back then, the company, which offers asset management, advisory and insurance services, didn't have a dedicated web destination. Instead, it boasted only a single page, buried on the American Express website.
"It didn't even have an adviser search tool," said Kim Sharan, CMO, president-financial planning and wealth strategies.
Under Ms. Sharan's leadership, the company and its advisers have embraced LinkedIn and, more recently, Facebook. About 7,000 of its 10,000 advisers have a profile page on LinkedIn. And just last year the company began integrating its adviser search with LinkedIn, allowing consumers to find out which advisers are already in their networks. And with most social media sites, Ameriprise has set up what it calls a premium social media packet, allowing advisers to make use of pre-vetted content that has already been cleared by compliance.
"Our advisers can really customize the way they go to market and make it more authentic," Ms. Sharan explained. "[Social media] is a phenomenal way to garner leads and stay in touch with the network [of customers]."
Facebook has also been approved for advisers as part of a national pilot program within the company. The program was started less than a year ago and requires an additional level of compliance as it allows advisers to post articles and take advantage of groups and networks.
"Being on Facebook is becoming more important, but Ameriprise wants to be extremely careful in picking the types of information its advisers share on social media," Ms. Sharan said, noting that about 350 advisers have active Facebook pages.
Still, social media has proven to be a tricky endeavor, given the strict rules set by the FINRA. The rules range from the prohibition to advise and make recommendations to clients to the need to track and archive communications. And with the increasing use of social media, FINRA is reinforcing its oversight. Last month it posted a letter saying it would require companies to submit an explanation of how social media is being used, measures in place to monitor compliance and a list of the top 20 producers who use social media.
Ms. Sharan said Ameriprise is working aggressively with third party companies that have built compliance platforms with tracking capabilities that allow advisers to meet FINRA requirements without checking each post with compliance. "Managing money should be as easy as buying shoes on the Internet," Ms. Sharan said. But the financial services industry, she added, still has a ways to go.