Erado Message Control Solutions today announced in a prepared statement that it has a multiyear agreement to provide social-media compliance services to LPL Financial.
The firm, according to the Erado statement, started using the Erado system in May to track and archive advisers' use of LinkedIn, Facebook and Twitter.
“Our partnership with Erado is an effective way of meeting rising demand from advisers for social-media compliance services. At the same time, this fits within our broader strategy of seamlessly bringing together leading solutions that are reliable, simple to operate and fully integrated on our proprietary technology platform,” LPL spokesman Joseph Kuo wrote in an e-mail response.
Craig Brauff, chief executive of Erado, said in the statement: “LPL Financial chose Erado's solutions for a number of reasons. The first reason is that our solution integrates with their existing surveillance infrastructure.”
This is consistent with what Mr. Brauff has said in interviews with
InvestmentNews — basically that his system allows broker-dealers and registered investment advisory firms to continue using their pre-existing reporting tools for e-mail and other archiving.
“Second, it's not proxy-based. As a broker-dealer or organization with thousands of advisers, managing the multitude of social-media-capable devices becomes virtually impossible and extremely expensive. This dramatically increases the risk associated with social-media content capture and allows a broker-dealer to defend social-media policy,” he said in the statement.
This reference was to some competing tools that rely on web browser plug-ins on the desktop machines or other computer devices (tablets and smart phones, for example), while others use proxy programs running on PCs or servers. Keeping that up with all an adviser's devices and computers can be difficult, however.
COMMONWEALTH FINANCIAL NETWORK
Commonwealth Financial Network this month has begun to support its advisers' use of interactive social-media marketing, which includes Facebook, Twitter, LinkedIn and blogs.
That includes being able to use the three social-media services to create posts and comment or provide status updates, as well as respond to others and click “like” or similar buttons and re-tweet.
Interactivity will be captured automatically and sent to Commonwealth's compliance team for post-review and retention.
The firm announced its intentions in April and already has partnered with Erado to offer its compliance service to
Commonwealth advisers. It had been beta-testing it for months.
Commonwealth also had stated it would absorb all fees associated with supervisory and compliance services, and would offer a weekly selection of preapproved Facebook status updates, tweets and blog posts to its advisers.
A BIT MORE ON HOW ERADO WORKS
While there are several other vendors that do similar tracking and archiving, Erado has taken a different approach from many other vendors by collecting social-media traffic at the source.
It does so by using the application programming interface provided by the major social-media applications.
By employing the integrations with each API, Erado is able to capture social-media content from each service and bring it back in to its systems, and in turn deliver it to the archiving applications already being used by the broker-dealer or advisory firm.
Taking Commonwealth as an example, that means passing along such traffic to its surveillance tool (Symantec Enterprise Vault, originally called KVS) in the form of an e-mail and eventually into the virtual hands of the broker-dealer's compliance surveillance review team.
That last part is important and allows those broker-dealers and RIA firms employing Erado to continue using whatever e-mail archiving and management systems they already have in place.
It does not matter whether the firm needs it in the form of e-mail, XML, text or SQL.
Firms in the process of selecting a system should pay particular attention to how well it integrates with their other installed compliance reporting and tracking systems.
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