You gotta be kidding! Those four words broadly sum up the financial industry's response to the new IIROC rules notice about the use of social media.
Meeting IIROC's extended hand with a clenched fist, industry participants wasted no time in dismissing the notice as IIROC trying to look trendy rather than showing any real understanding of the social media phenomenon.
Leading the charge is Stephanie Holmes-Winton, a Halifax-based financial advisor and author who feels intensely about the subject. "I feel that it is unclear from this document if those who drafted these new rules actually know how social media is supposed to work, or if their priorities are simply to manage liability," says Holmes-Winton.
She primarily targets the 'Third-party Communications and Research" section of the document which states "re-tweeting a client post or providing a thumbs-up may be considered an endorsement."
Not allowing advisors to actively and freely communicate makes them terrified of the repercussions and defeats the purpose of social media altogether. "If during the course of my social media time each day I were forbidden to 're-tweet' or 'like' anything, my presence on sites like twitter would be that of a voyeur or maybe even the promoter of a few pre-approved, very corporate sounding 140 character advertisements," she says.
That is not to say there aren't those who are just glad to see IIROC take the first step.
"For advisors who have embraced social media, the good news is they no longer need to do it with one arm tied behind their back," says Jay Palter, senior consultant, Palter Social Media Strategies. "For those who've been content to bury their heads in the sand, there's a lot of catching up to do."
The IIROC bulletin is certainly seen as a stamp of approval by Lisa Langley, president, International Product & Service Group (IPSG). As a former vice-president of member services at IIROC, she sees a clear shift in IIROC's approach to social media.
"Now they are being more specific in making sure how the rules apply," she says. "They are saying that your role is to supervise live content, so they are making the same distinction as FINRA (in the U.S.) did in static communication versus live."
Anything static, like a Facebook page, is required to be pre-approved by a firm's compliance department. The new IIROC guidelines serve as a specific reminder of the prohibition of anonymously engaging in live social media environment such as blogging and tweeting.
"If you are in the industry, you can't be trying to move, in the position of an analyst, the price of a stock by anonymously blogging or tweeting."
The notice, says Langley, reminds firms of the difficulties in going down the social media road. "They're still accountable, there's no forgiveness. If you're going to be active in social media then you bear the consequences of making sure you supervise what somebody's saying on a blog or a tweet."
And therein lies another problem. The added responsibility of supervising live content will only add to workload worries of firms' compliance department. And this may make them loath to allow advisors to engage in social media.
As Holmes-Winton points out, "these new guidelines also don't necessarily require individual dealers to allow access to social media by their members."
It is well within a firm's purview to disallow the use of these tools, says Langley. They may say "social media tools are too much work for us" and that "we're too thinly resourced to be able to stay on top of this". There are many firms who'll resist opening up to social media, but those who grasp it will have a competitive advantage, adds Langley.
This loophole may turn social media into a mere small-firm advantage where it would be relatively easier to manage content, Langley says. "They're the ones who're going to be able to rally around it much more quickly; big firms will still play but not in the same way."
Streaming video is another area that slipped through IIROC's net. The notice failed to outline laws around webcasting and video interaction. "This is another social media tool that is out there in a big way and they didn't comment on that specifically," says Langley.
Even when firms permit advisors to use social media, it won't be easy, says an industry professional who requested anonymity for being actively engaged in social media. "Let's be serious, for the first few years advisors won't be able to leverage social media, even though they'll be allowed to use it."
What attracts twitter followers and Facebook fans is not going to be advisors who tow the company line—and that's all that they'll be allowed to do.
"For the first little while, most advisors will use it without much in the way of results, simply because the compliance restrictions will take time to adapt to a point where meaningful contributions will be allowable by industry participants en masse," he says. "Until then, it will be just a 'look, we're hip' thing."