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The model for communications by financial advisors has changed significantly with the digital tide of technology. Firms and advisors alike now embrace social media, electronic messages and online tools for shutterstock_284761541communicating in their practice. They’re also finalizing these communications by sending documents through the cloud to sign via e-signatures. Not surprisingly, with the adoption of digital communication and transactions comes compliance responsibilities and concerns regarding cybersecurity, message content and adherence to industry regulations.

The recently released 2015 Electronic Communications Compliance Survey, produced by Smarsh, a cloud-based archiving solution for financial advisors, offers a pulse on the key trends and concerns of the financial services industry.

Here are the key takeaways financial advisors need to know from the report:

 

Greater social and mobile engagement continues to grow within firms.

It should be no surprise that financial services firms are active on Facebook, Twitter, LinkedIn and other social media channels. Effectively communicating with clients and prospects is the key to financial advisors’ success, and doing so on social media gives firms an inexpensive and personal way to reach more people.

Advisors are becoming more comfortable with social media, too. “New and emerging channels” was cited as a concern by less than half of the survey’s respondents, whereas more than half had cited this concern in the last five annual surveys. Among firms that allow LinkedIn, 80 percent allow personal pages for business communication. 64 percent allow personal pages on Twitter. Text messaging between advisors and clients, however, has not reached this level of acceptance.

From a compliance perspective, the survey brings to attention the importance for firms to monitor content on advisors’ personal social media accounts, just as company accounts are monitored. Personal, yet professional communication that doesn’t cross the line of industry regulations or amplify risk is a balancing act that requires guidance.

 

Cybersecurity creates a new role for compliance.

Financial services compliance is growing into a more proactive and expansive role in the digital environment, and the latest Smarsh report echoes this sentiment.

The survey found that:

  • Only 58 percent of firms felt completely confident to face a malware attack
  • 62 percent were prepared for a traditional account takeover, such as a hijacking of passwords and client user names
  • 66 percent were prepared for a general loss of client information and data
  • 66 percent were prepared for insider operational risks

 

These cybersecurity concerns aren’t an issue for the technical department alone. The Smarsh survey reports that, in the past year, 83 percent of respondents participated in conversations about risks related to cybersecurity and 58 percent expect their role to change as a result of managing such risks.

While true for all wealth managers, this will be of particular importance for financial firms using e-signatures, as data and documents are transported and sent, received and signed electronically through the cloud – not with ink, paper and postage.

 

Data upon quick request is a concern for regulators.

According to the Smarsh report, the top issue of electronic message production is the fact that many different platforms and channels are used to retain archived data. With FINRA stating that firms must provide responses to information requests in a reasonable timeframe, compliance officers are concerned about the quick turnaround. Here are the factors contributing to the lack of confidence:

  •  46 percent: Searching across multiple places and applications
  • 45 percent: Lack of familiarity with the technology
  • 39 percent: Staff resources

 

In order to alleviate these concerns, compliance officers should keep ease-of-use and integration in mind adopting new digital technology like e-signatures, new digital communication platforms and data archiving solutions. A single platform holding all data (that can be easily integrated into an existing system) would best manage electronic messages from various communication channels.

 

All the wrinkles of technology aren’t yet fully ironed out, but I’m excited to see digital communications and social media continue to expand throughout the financial advisory industry, and I hope to see that number rise next year.

 

For more information on communication trends and compliance, download the full survey report here.

 

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Amy McIlwain is the vice president of social & digital strategy at Moore Communications Group. She is an international speaker, author and digital & social media marketing expert with expertise in financial and insurance compliance. Follow her on Facebook, Twitter and LinkedIn.

 

 

 

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