Archive for June, 2011
Shorting stocks in their diapers
Posted by SarahActiance in Compliance, Enterprise 2.0, FINRA, Social Networking, Trends on June 30, 2011
19, 24, 25, 25, 21. No, these aren’t yesterday’s winning Powerball numbers, but rather, the ages of Zuckerberg, Brin, Page, Gates, and Jobs when they founded their companies (Facebook, Google, Microsoft, Apple, respectively).
They may be the Titans of Tech, but they all have something else in common: they were all “kids” when they started their companies and they’re all pitching technologies that are now altering the wealth management landscape – social media and mobile.
It’s both fair and appropriate that I give credit to the statistics and information that I’m going to cite up front – you see the inspiration for this blog post came from a recent research paper written by Bill Doyle over at Forrester Research. Bill’s been doing some work recently in the area of Wealth Management and Social Technologies – and has published his findings (there’s more work coming out, too, so watch this space).
So back to the Titans of Tech… given that technological innovation seemingly is the province of “twenty-something” geeks and entrepreneurs, it should come as no surprise that it’s the younger folks leading the charge in the adoption of social media and the mobile Internet for wealth management. Specifically, it’s the Generation Y’ers (ages 18 to 30) that are driving the growth of mobile and social. Following close behind them are the Gen X’ers (ages 31 to 44), the Baby Boomers, and the Seniors – in that order.
But, even amongst the Seniors, 47% of this segment have at least one account with a social networking site. Furthermore, given that the Baby Boomers are the ones with the most investments, it’s not far off when social media and mobile will become the primary weapons for investment advisors to attract and retain clients. And, even among the Gen X’ers and Y’ers (the latter growing up with iPods and iPhones in their hands), as they accumulate wealth, they will continue to use the media with which they have grown the most accustomed – social and mobile.
So, all signs point to people of all ages increasingly turning to social and mobile to manage their money. That’s why wealth management firms are so keen to really understand the regulatory environment, or in the event there are no regulations, then to lobby for clearer guidance from the SEC and/or FINRA. Already, FINRA convened a task force in March of this year to assess what, if anything, needed to be updated on Regulatory Notice 10-06 (originally issued in January 2010).
The Forrester report goes into additional detail – and makes a number of suggestions for wealth management firms and what they should be doing. We’ve collaborated with Forrester to make a copy of this $399 value report available to you on a complimentary basis – and you can download a copy of it here. Stay tuned also and hear Bill Doyle speak in both New York and Boston alongside leading brand names in Financial Services on what’s going on in the social world and how you can best address it!
Beer and SEC Don’t Mix
Posted by nleong in FINRA, Social Networking on June 17, 2011
The amusing case of the Securities Exchange Commission (SEC) putting the smackdown on two gentlemen who likely were feeling nostalgic over their days swilling Pabst Blue Ribbon (PBR) beer illustrates how powerful social media has become. Michael Migliozzi and Brian Flatow, a couple of advertising executives, used Twitter and Facebook to secure over $200 million in pledges to buy Pabst Brewing Company, the makers of PBR. Their intent was to offer shares in the acquisition vehicle to those who pledged money.
Problem is that Sudsmeisters Migliozzi and Flatow didn’t file any registration papers with the SEC to sell such an offering. They ultimately yielded to the SEC’s cease-and-desist order, but the lessons learned were all too clear: (1) social media’s a quick and effective way to rack up $200 million in pledges in just three months, and (2) the SEC is watching. Yes, the SEC may be a government agency, but at least, it’s doing its best to stay current on trends falling within its scope, applying old-school analysis along the way.
Yup, we here at Actiance keep tabs on cases like these since it seems inevitable that social media-related cases will become standard fodder for SEC enforcement actions. Just as their FINRA brethren are blazing the trail with respect to social media-specific regulatory guidelines for broker-dealers, the SEC is following close behind on matters dealing with securities and investment advisory services. FINRA has already issued its seminal social media-specific disciplinary action in what is sure to be the first of many.
As social media continues to entrench itself in our daily lives, both personally and professionally, the regulatory watchdogs will become ever more vigilant to ensure that their guidelines are adhered to. Or, put another way, social media is the girl that every guy wants to take to prom, but that doesn’t mean that her father isn’t lurking far behind, baseball bat in hand . . . and a PBR in the other.
Disgrace of the Weiner Man
Posted by nleong in New Internet, Social Networking, Trends on June 15, 2011
There’s the old adage, “Live by the sword, die by the sword.” In Rep. Anthony Weiner’s case, though, it was a sword of a different kind that got him in hot water. His virtual epitaph would read “Live by Twitter, die by Twitter.” Such are the times we live in today.
I’m not gonna bore you with the details of Weinergate as I’m sure you’ve all heard your fair share of Conan and Letterman jokes by now. But, I will, however, say a few words on the role Twitter played in bringing the Weiner Man down.
We’ve read about the guy who tweeted about the raid on Osama’s compound while it was happening. We’ve read about Gilbert Gottfried’s insensitive tsunami tweets. And now we’ve seen pictures of the Package making the rounds on the Internet courtesy of Twitter. All these anecdotes just go to show that words (and pictures) travel super-fast in cyberspace and that what you consider private may not be so private after all, especially when you’re dealing with social media.
The success of sites like Twitter and Facebook is predicated on rapid expansion of the user base, the viral nature of social media, and the seemingly endless need to keep in touch with friends, colleagues, and constituents (in the Weiner Man’s case). What with so many friends, connections, and followers out there, it’s oftentimes tough to keep track of all your privacy settings for each person or group of contacts. All it takes is one misstep and you’re hosed (ahhh, another phallic reference).
As social media is still beset by many legal questions and oftentimes murky regulatory guidance, it behooves folks, whether they’re financial advisors, insurance agents, physicians, scientists, or politicians, to behave appropriately and prudently until such time that clear guidelines are made available as to what’s permissible and acceptable with social media.
The financial services industry was one of the first verticals to issue social media-specific guidelines, but even so, there still remain some uncertainty as to what to do with, say, client testimonials and replies to blog entries. The pharmaceuticals industry has long been rumored to be close to issuing its own set of social media guidelines. And, of course, government has hopped on the bandwagon, too, in an attempt to serve the public better and to make its politicians more accessible and accountable.
Ah, if the Weiner Man and his handlers (!!) had only had a technology solution in place to monitor his tweets and packages, he might’ve been able to escape unscathed. But alas, the Weiner Man got caught with his pants down, feeling the winds of shame. I can’t wait to see this tag cloud.
I’m outtie.
