Commonwealth Financial to Allow Rep Access to Social Media

"For instance, if an advisor logs on at home, only his business Facebook activity is tracked, not his kids Facebook activity," Estabrook says. "From our analysis, Erado was the only vendor that had that capability. The other solutions couldn't separate them out.

When asked why the firm went with a third-party vendor, as opposed to tracking social media in-house, he says it's a new space for the company, and having  outside expertise means they can get answers quickly, and the speed to market means their advisors can begin using it sooner rather than later.

"The primary reason broker-dealers use a firm like ours," adds Brauff, "is that they have technical, as well as human management issues that they might not be familiar with in this realm."

 "Knowing the landscape, I wasn't holding my breath for something like this to happen anytime soon," says Ted Kerr, managing partner with Sewickley, Penn.-based Touchstone Capital, a Commonwealth-affiliated firm. "They weren't saying much about social media, because they didn't want to put it out there and then not be able to deliver. But they mentioned a bit about it at their last conference. Once I heard that, I knew it was going to happen soon."

Kerr says he will use it for two primary functions. Like many advisors, he has close relationships with clients, but only gets to see them in person two or three times each year. Social media adds a new dimension to the relationship, he says, that would not otherwise be available.

"My wife and I are in the process adopting a child from El Salvador," he says. "Clients ask us about it when we see them, but now we can update them on how it's going and post pictures via social networking. And it's a two-way street. I can keep up-to-date on client surgeries and were they might be vacationing."

The second function, he says, is in real-time market analysis.

"Our industry's regulation makes communication difficult; any kind of market commentary has to go through a somewhat cumbersome compliance process," he says. "Because social media is considered public speech, we can comment on market events much more quickly, which goes a long way in setting our clients at ease and making them feel comfortable."

Commonwealth advisors will be able to comment, post, respond, "like" and retweet on Facebook, Twitter, LinkedIn, and company blogs. Interactivity will be captured automatically and sent to Commonwealth's compliance team for post-review and retention.