January 27, 2012

Investing in Social Media Means Keeping a Careful Watch on Accounts

First published on Technorati by Lisa Stephens.

Financial advisers can draw a wealth of information from following clients and leading edge businesses on social media sites like Facebook, Twitter and LinkedIn. These advisory firms typically keep secure features such as filters and secure firewalls in place on their systems to protect internal computer networks. These precautionary measures may not be enough to monitor profiles, especially if profiles are being stalked by hackers.

The risk may be beyond the customary fear that a disgruntled or dissatisfied user might decide to post false or misleading information out of spite or to create some competitive breach within a daily internet workstream. It could be that some connections a firm may allow are designed to infect or hack a system in order to inflict harm and disrupt an adviser’s computer network, say technology professionals.

“I don’t think advisers have given much thought to protecting themselves from hacking on social media sites,” says Korrine Kohm, vice president at Ascendant Compliance Management. Although these firms may have safeguards in place for internal computer networks, these do not extend to applications which create access to social networking sites on various portable devices, according to Kohm. The fear is that advisers may neglect the guarded vigilance it takes to notice a potential for risk.

Social media monitoring, archiving software, and personal responsibility can help advisers keep track of their network communications. Keeping aware of internet contact, and keeping track of every incoming or outgoing communication should make anything out of the ordinary an immediate and an obvious red flag for investigation by corporate and individual administrator, per profile. This should eliminate concerns over hacking which regulators monitor.

Currently, advisers must archive posts and messages for a period of three years, according to recent regulatory guidelines. Hackers could distort archives should they gain access, according to Conrad Jacoby, a senior attorney at Winston & Strawn LLP in Washington.

Glen Gilmore, a social media lawyer and principal at Gilmore Business Network, a consultancy in Hamilton, New Jersey, suggests monitoring communications through regular, ongoing reviews of social media profiles which should keep advisers immediately aware should a problem arise or a breach occur. This would include early response for reputation management should an embarrassing message come from a hacker.

“Companies have to anticipate there will be problems,” says Mr. Gilmore, “but how they handle it is what separates who masters social media and who doesn’t.”

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