If you’re a registered broker or work for firm that sells any sort of investment products, you’ll want to think twice before blurting out anything that could be construed as investment advice on Facebook, Twitter, or any other social networking site. The Financial Industry Regulatory Authority (FINRA) has updated its guidelines for interpreting the rules that govern how brokers present advice to the public to cover online social networks; and, in some cases, the guidelines rely on social network monitoring and archiving technology that doesn’t even exist yet.
The new guidelines have two broad effects on the way financial firms use social media. First, the new rules attempt to take the traditional distinction between marketing a brand and hawking specific investment products, and to enforce it in online venues that sport a constantly evolving slate of features and functionality, and where the lines between the personal and the professional—or, the personal and the promotional—aren’t always clear.
If large organisations are challenged when it comes to adapting to the complexity and rate of change that the social web brings about, what chance do regulators in industries like finance and pharmaceuticals have?
As we can see in the Ars Technica post quoted above, they know they have to do *something* however, and in the case of the Canadian Financial Regulatory Authority (FINRA) that means effectively having to put in place rules about what technologies and behaviours * might* emerge on social networks.
The other big challenge is making a distinction between people’s personal and professional presence and activities online. In one case, someone has been told that they have to delete their LinkedIn profile as it is clearly professional communications, but Facebook’s OK as it’s seen as personal.
This is of course, a nonsense. Work/life divisions blur all the time, and especially online. I may not use Facebook for business, but plenty of people do – and any regulator (or employer interpreting the rules) will it difficult to define personal/professional differences by platform.
As ever, the danger is that businesses and whole industries will lose out on the benefits of connected, digitally literate people working in them if their instinct is to clamp down on the use of social media.
New norms and ways of behaving will need to be worked out. It won’t be quick though…