Monthly Archives: May 2011

Social Media ‘Evolution’ At Nation’s Investment Firms

26 Thursday May 2011

Posted by in Branding, Business, Communication, Customer Relations, Ethics, Government Regulation, Information Technology, Internet, Management Practices, Public Relations, Social Interactive Media (SIM), Social Media Relations

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Paul Kiser

Can your investment advisor write a blog about his or her job? Can they Tweet that they just read a great article on oil futures and add a hyperlink? Can they post that they had a big day in the market? Prior to January 2010, the answer was no…not unless they wanted to risk her or his job.

Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) rules didn’t specifically prohibit business-related Social Media participation, but SEC regulations on advertising and communications have been presumed to extend to online engagement and in a vacuum of good guidance, most major firms took the position of forbidding their representatives from participating in Social Media formats. This removed the fundamental aspect of Social Media that benefits commerce on the Internet, the one-on-one connection.

In January 2010, FINRA issued Regulatory Notice 10-06, which gave investment firms parameters for allowing their representatives to use Social Media within the bounds of SEC and FINRA regulations. The reaction was not instantaneous because firms had to solve the issue of how to supervise agent’s online communication. Protocols had to be established, software had to be adapted and installed, and training of agents had to be implemented; however, there has been a rapid Social Media ‘evolution’ in investment advising during the past 12 months.

For some firms, a deliberate, but ‘conservative approach’ to implementing Social Media engagement is being employed. One industry representative said, “…we had to help agents know what they can talk about and what they can’t talk about.” But she added, “…I’d rather be doing this now than wait three years and try to figure it out…Social Media exists and it’s not going away.”

For New York Life the direction was made very clear according to Ken Hittel, Vice President, Corporate Internet, who said, ” Our CEO, (Ted Mathas) made it very clear that agent participation (in Social Media) is a requirement.” New York Life uses a software program to meet SEC and FINRA regulations of supervising agent’s Internet interactions. Hittel said that the implementation of the program, “…went smoothly and was completed in a couple of months.”

The SEC regulations on advertising and adviser/investor communications are not new and apply to all methods of interactions, including those performed via the Internet. A FINRA podcast outlines five issues that apply to all forms of investment communications. All statements made by an agent must:

  • not be exaggerated or misleading and all material facts must be disclosed
  • clearly identified the firm and agent
  • not include or imply any forward-looking statements
  • provide the customer/investor a sound basis to evaluate the services or market
  • file any statements regarding mutual funds, variable products, and/or exchange traded funds within 10 days of being published

Each investment firm is expected to train their agents on how to comply with SEC and FINRA requirements. Hittel said that the New York Life agent training program is “..not just compliance.” He pointed out that Social Media creates 12,000 “Brand Ambassadors” for the company and they based their Social Media training on a “best practices” approach. Hittel said that there is a saying at New York Life, “…that you can do anything, not everything,” which is reflected in New York Life’s approach to Social Media engagement. The firm has established a progressive program for Social Media participation by their agents…within the scope of SEC and FINRA regulations.

FINRA Clearing a Path for Investment Firms to Engage in Social Media

25 Wednesday May 2011

Posted by in Business, Customer Relations, Ethics, Government Regulation, Management Practices, Public Relations, Social Interactive Media (SIM), Social Media Relations

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A version of this article first published as
Investment Firms Allowed to Use Social Media Under SEC/FINRA Rules
 on Technorati.com

Paul Kiser

Eighteen months ago a game launching bird heads at pig heads didn’t exist.

Eighteen months ago Tony Hayward was a star as CEO of BP.

Eighteen months ago most people thought Charlie Sheen was an actor.

Eighteen months ago most investment firms thought that financial advisors were prohibited from using Social Media in business.

Now Angry Birds is near world domination, now Tony Hayward is a footnote in public relations infamy, now we know Charlie Sheen is Charlie Harper…the possessed version of him, and now Social Media is not taboo in the investment business.

…in the world of investing, the Social Media ‘evolution’ has had to meet the compliance issues of the regulatory agencies meant to protect the investor from unethical advisors…

The world is evolving faster than most people can absorb, so it’s not surprising that some industries are adapting to new technologies faster than others, but in the world of investing, the Social Media ‘evolution’ has had to meet the compliance issues of the regulatory agencies meant to protect the investor from unethical advisors.

Social Media tools like blogs and Internet-based social networking tools have opened up a new environment for business by allowing a rapid-response connection between the customer and the seller of a product or service. In most Internet commerce it is a caveat emptor (let the buyer beware) situation, where the buyer must pursue legal remedies for a broken contract or unethical representation of a product or service after the fact. In investment advising the company or firm is expected to protect the buyer before, during, and after the fact, which requires the firm to intercede and supervise interactions that involve investment advice. That has led many firms to prohibit all Social Media involvement by its representatives.

However, seventeen months ago the largest independent financial regulator stepped forward with a road map for investment firms on how Social Media could be used by their representatives while meeting the need to protect the investor.

…the regulations only effect business communications that involve investment advising and promotion. Personal blogs, Twitter, Facebook, and other Social Media tools are not a concern for the regulators…

Joseph Price, Senior Vice President of Advertising Regulation/Corporate Financing at FINRA (Financial Industry Financial Authority) discussed the issues with investment firms and Social Media with me earlier today. Price is one of the authors of Regulatory Notice 10-06 titled Social Media Web Sites – Guidance on Blogs and Social Networking Web Sites that was published in January 2010. Price said that using Social Media, “..depends on the firm’s business model,” and that it, “..has to make sense for the firm.” He confirmed that the regulations only effect business communications that involve investment advising and promotion. Personal blogs, Twitter, Facebook, and other Social Media tools are not a concern for the regulators even though individual firms may have policies prohibiting personal on-line interactions.

Price said that a common question he hears from firms is from those who prohibit all Social Media involvement by their representatives. Their concern is whether a firm is meeting the regulatory requirements when they have no Social Media supervisory functions in place because they have prohibited the activity.

Another question that FINRA has had to deal with involves deleting inappropriate user comments in chat rooms and on blogs. Price asked, “..by selective deletion, has the firm adopted the posts they haven’t deleted?” His suggestion to firms is that they have a policy in place that outlines the approval/deletion of comments. As long as a firm follows the policy and doesn’t prejudice the comments to favor the firm and its products, the company will likely not be considered to have approved and adopted the user comment.

Regarding investment business blogs, Price explained that they “require prior approval” by a firm before they are published because they fall into the category of a static communication that includes any form of advertising.

The Regulatory Notice 10-06 answers ten questions for firms about guidelines for using Social Media in the industry of investment advising.  FINRA has followed up that document with webinars, podcasts, and seminars to assist their member firms in the ongoing process of adapting regulatory requirements to Social Media tools available to the rest of the business world.

Firms now the option of fully engaging in Social Media, which is rapidly becoming less an option and more a matter of survival.

Five Reasons Why You and I Are Still Here, Post-Rapture

21 Saturday May 2011

Posted by in Ethics, Lessons of Life, Random

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Paul Kiser

If you’re reading this then you didn’t get saved either. Allow me to offer some reasons why this may be.

Reason One: We didn’t get saved because we’re bad and now we’re going to suffer. I lived through LBJ, Nixon,Reagan and Bush (x2) and heard Sarah Palin speak, so…. been there, done that.

Reason Two: There is no God and all of this is a pointless fantasy of mythology.

Reason Three: God couldn’t find anyone to save so he’s just going to wait until October 21, 2011 and flush us all.

Reason Four: God decided that we’re all saved and this is Heaven. That’s the most disturbing of all of the possibilities.

Reason Five: Harold Camping and his followers have exploited some people’s need to feel anxiety and fear about our lives and our future, even though they would be eventually exposed as frauds.

I’ll leave it for you to choose the reason that works for you, but personally I…..


Does FINRA Prohibit Social Media Activity for Investment/Financial Firms?

19 Thursday May 2011

Posted by in Branding, Business, Communication, Customer Relations, Customer Service, Ethics, Information Technology, Internet, Management Practices, Public Relations, Social Interactive Media (SIM), Social Media Relations

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Paul Kiser

Last year I managed to offend some investment and financial professionals when I said that their industry would have to engage in Social Media, including blogs, if they were going to stay competitive. They told me that their firms and industry regulations prohibited them from using Social Media tools in their business practices. They also said that some firms that prohibited personal involvement in Social Media. The reaction during and after the meeting was one of a strong denial of the usefulness of Social Media in their industry mixed with a ‘kill-the-messenger’ attitude. It was a typical response by business people who have been blindsided by Social Media.

…Professionals that rely on personal contact and personal relationships are finding that effective use of Social Media is key to maintaining and growing their business.

It is hard to start a dialogue with business professionals on how to use Internet tools such as blogging, Facebook and Twitter when the attitude is that Social Media are an encompassing evil that must be avoided, or at the very least, ignored. The problem, and opportunity, is that business professionals who can use Social Media to engage with others will have an advantage over those who are mystified, or more typically, scared by the power of Social Media. Professionals that rely on personal contact and personal relationships are finding that effective use of Social Media is key to maintaining and growing their business.

The fact is that since that meeting many investment related firms have changed their positions by at least 90° and some have done a 180° shift in their attitude about Social Media in business. That is not surprising considering that their future is at stake; however, investment firms do have strict guidelines on advertising and investment advisement, so using Social Media is not the ‘anything goes’ environment for which most of us are accustomed.

Both the Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA)[1] are charged with protecting investors by establishing rules to govern investment-related activities. Among those rules are requirements for firms on educating, monitoring, supervising, and document the activities of brokers representing their company. In January 2010, FINRA issued Regulatory Notice 10-06 titled Social Media Web Sites – Guidance on Blogs and Social Networking Web Sites. This notice did not prohibit firms from engaging in Social Media activity, but rather offered common-sense guidelines for investment firms on how Social Media tools could be used to meet FINRA and SEC requirements.

(End of Part I)

(Note: Part II will be posted by 5 PM PDT, Monday, May 23rd)

[1] FINRA is the largest independent regulator for all securities firms doing business in the United States. FINRA’s mission is to protect America’s investors by making sure the securities industry operates fairly and honestly. All told, FINRA oversees nearly 4,550 brokerage firms, about 163,500 branch offices and approximately 631,110 registered securities representatives. (From About FINRA at www.finra.org.)

(This article is advisory in nature and the author does not represent the Financial Industry Regulatory Authority (FINRA,) the Security and Exchange Commission (SEC), nor any federal or state regulatory authority. The opinion expressed should not be considered as a legal or official position regarding the use of Social Media tools in industry practices.  The author has sought out publicly available relevant documents and information as the basis for the opinions expressed; however, final authority on the issues discussed in this article rests with the appropriate government, regulatory, and/or company division that oversees the area of concern.)

May 21, 2011 Rapture Prediction Demonstrates Weakness of ‘Having Faith’

18 Wednesday May 2011

Posted by in Ethics, Lessons of Life

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Paul Kiser

Christ is coming this Saturday…look pious.

This Saturday (May 21, 2011) is the date of Rapture according to a California Christian church that I won’t dignify by identifying. As a former Christian who has studied the Bible from beginning to end, I am amazed by Christians who seem to lust after predictions of Armageddon, especially those who claim to know when the actual date of Rapture or the end of the world. There are few things that scream, “I’m a fake Christian!” more than someone who is obsessed with the end of the world.

Real Christians know that their owner’s manual for life, the Bible, clearly states that no human can predict the end of the world (Matthew 24:36,) so a ‘Christian’ who states they know that the end is coming this Saturday is claiming they have knowledge which equals that of their God, which is supposed to be heresy. That doesn’t stop people from doing it. Some of the end-of-the-world predictions according to Wikipedia:

  • By March 21, 1844 – William Miller
  • October 22, 1844 – William Miller’s revised prediction. Miller’s followers began the Seventh-Day Adventist Church after his predictions failed.
  • 1914 – Jehovah’s Witnesses
  • 1918 – Jehovah’s Witnesses
  • 1925 – Jehovah’s Witnesses
  • 1942 – Jehovah’s Witnesses
  • 1981 – Chuck Smith
  • 1988 – Edgar C. Whisenant
  • 1989 – Edgar Whisenant
  • 1992 – Edgar Whisenant
  • October 28, 1992 – Mission for the Coming Days
  • 1993 – Multiple groups who predicted the seven-year ‘Time of Tribulation’ to start in 1993 and end in 2000
  • June 4, 1994 – John Hinkle
  • September 6, 1994 – Harold Camping
  • 1995 – Edgar Whisenant
  • 2000 – Multiple groups
  • May 21, 2011 – Harold Camping

These predictions have caused believers of the mythology to ‘check out’ of the real world and in some cases kill themselves before or after the date. The latest prediction has caused at least one couple to sell everything and move to Florida…I could make guesses about why Florida was their end-of-the-world destination, but I don’t want to offend Floridians who will still be around on Sunday.

These predictions by church leaders illustrate the an inherent problem with mythology, which is the lack of boundaries on ‘having faith.’ Anyone can say anything and insist that it is true because they ‘have faith.’ ‘Faith’ allows people to ignore common sense and often, even the Bible, in their pursuit of teachings that they personally favor and can’t  justify. ‘Faith’ allows people to impose their hate and judgement on other people when the Bible clearly states that their God is to be the only judge over other people.

All of us have faith in something and faith, by itself, is not bad. I can respect anyone who has ‘faith’ providing their ‘faith’ is self-contained, but in the past three decades, ‘faith’ has become cry of racists and misogynists who use it to convince governments to pass laws that reflect their desire to inflict their beliefs on others.  ‘Faith’ is a dangerous concept in civil society where majority-rule is supposed to be guided by common sense, reason, and respect for all.

May 21, 2011 is only significant in showing us the folly of blind faith.

Courtyard in Dallas: A Hotel For Real People

04 Wednesday May 2011

Posted by in Business, Customer Relations, Customer Service, Internet, Re-Imagine!, Travel

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by Paul Kiser
USA PDT [Twitter: ] [Facebook] [LinkedIn] [Skype: 775.624.5679]

Paul Kiser

I spend more time than most people I know in major market hotels and typically they can be lumped into the category of ‘people warehouses.’ Sometimes I find a hotel that has made an attempt to make the lodging experience something more than a Orwellian, mega-corporate vision of a room with a bed. It is rare; however, to find a hotel that was intentionally designed to make a real person welcome and wanted.

Courtyard by Marriott Front Desk in Dallas, TX

The Courtyard by Marriott DFW Airport South in Dallas, Texas is one of those rare exceptions.

Located near the Dallas-Fort Worth Airport and near two freeways (Texas 183 and 161) the Courtyard hotel could easily fall into the trap of the thousands of chain hotels near major transportation centers that seem to be set up to process travelers as quickly and efficiently as possible, but absent of any warmth. The Dallas DFW Courtyard by Marriott is efficient, but it is also friendly, customer-focused in the important details, and well designed.

The desk and flat screen television in my room

When I walked into the hotel I found a relatively small registration desk as opposed to those massive registration desks in some hotels where it looks like they could take care of 20 guests at once, but only have one person on duty. I was greeted with a friendly smile by a devastatingly attractive young woman named Amy who made me feel like I was the only person she would be helping that day. There was another young man there named Chris, but for some reason I didn’t notice him as much. 🙂 I did have a chance to talk to him later in the evening and he was very helpful.

In addition to the friendly staff, I also noticed that the front desk has an opening in the middle so that the person behind the desk can step through quickly and easily. The design made me feel like they were real people behind the registration desk, not caged robots.

A Self-Service Board Pass Print Station

As I was going to my room I noticed that the sleeve for the plastic room key said, “This key is not meant to lock you in your room.” That is was the first time I have ever had a hotel openly express that to me as a guest.

The room size was slightly larger than most hotel rooms, and the arrangement and the furniture were atypical for a standard hotel room., It made it feel more like a suite than a warehouse. The room had free WiFi Internet access and a flat screen television, which are two of my critical tests of quality. Free Internet says, “we know you’re a mobile person and access to the Internet is important to you so we’re not going to gouge you for $14/day for it.”

A flat screen television demonstrates that the hotel is keeping their facility updated. Old televisions are bulky, ugly, and tell me that the money I spend for the room is not being reinvested in the facility. Another test of quality is access to outlets in the room and the Courtyard has them, including outlets on the wall lights near the bed.

Food/Bar Counter Makes the Entire Lobby a Gathering Place

I had already decided to go out for dinner before I arrived, but I changed my mind once I had seen the lobby/restaurant area. This hotel has a unique lobby design. Opposite of the registration desk is a partial oval bar/counter for ordering food and/or drink, but behind it are tables and chairs as in a restaurant dining room.

Around the room are pod-like areas with flat screen televisions scattered about, all on different channels. The food preparation area (kitchen) is not in sight. Every thing about this area, and another large lobby area opposite the registration/bar area is designed to welcome people to congregate and relax. It is a Starbucks®-like model, only with full food and drink service. The food was excellent and the service from the man and another young woman in the food service area was great (and yes, she was also devastatingly attractive.)

Additional Gathering Space in the Lobby Area

The lobby also has a large touch screen digital bulletin board to access hotel and local information and a separate area with video screens of DFW airport flight status reports AND a station to print out airline boarding passes. The Courtyard does not forget its customers are often travelers and these key details prove that the hotel works hard to accommodate the needs of traveling guests.

I found that everything about the Courtyard by Marriott indicated that they have Re-Imagined the concept of a hotel and they have used the viewpoint of the guest, not the accountant, as the guide in its design. In addition, the Alex Nguyen, the Director and General Manager of the facility must have a strong ability to convey to his staff the need for reaching out to the guests and making them feel at home. I know I will not forget my short stay there and I appreciate design of the facility and the warmth of  the staff.

Well done!

(This article was not solicited or approved by the Courtyard by Marriott, nor was this article written with any understanding of compensation, nor quid pro quo exchange.)

FAA + Airlines + Personal Electronic Devices = Public Mistrust

03 Tuesday May 2011

Posted by in Communication, Customer Relations, Ethics, Government Regulation, Information Technology, Management Practices, Public Relations, Travel

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by Paul Kiser
USA PDT [Twitter: ] [Facebook] [LinkedIn] [Skype: 775.624.5679]

Paul Kiser

Recently, a 73 year-old man flying from Minneapolis, Minnesota to Winnipeg, Canada was ordered by the flight crew of an unnamed airline to stop using his Global Positioning Satellite (GPS) device during the flight. The GPS device tracks the user’s current position by receiving (not transmitting) a signal from orbiting satellites. Currently over half the world’s airlines allow it to be used during a flight, but not this airline. The man was arrested and fined for not obeying the flight crew instructions to turn it off and also refusing to buckle his seat belt. Not surprisingly his last name was, Ego…I’m not making this up…his name was Michele Ego (See article in Winnipeg Free Press.)

…the incident was based on the Flight Attendant enforcing an 18 year-old policy of restricting the use of  personal electronic devices (PED’s) that has little or no real experimental data to justify it…

Are these really a threat to airline safety?

Clearly Mr. Ego was in the wrong by refusing to obey the instructions of the flight crew; however, the incident was caused by a flight crew enforcing an 18 year-old policy of restricting the use of personal electronic devices (PED’s) that has little or no experimental data to justify it. The zeal of some flight attendants in following this baseless policy creates a source of conflict and mistrust between the flying public and the flight crew, all of which could be avoided, if not for the Federal Aviation Administration (FAA) and the airlines.

…the policy uses decades old research that could only pose a theoretical threat by PED’s, without any experimental proof…

The lack of evidence for the restrictions on PED’s (such as MP3-4 players, GPS, cell phones, etc.) is well-known, and yet, airlines stick to a policy of restricting them, especially during takeoffs and landings because of the FAA’s order issued in 1993, that each airline must prove a PED will not interfere with the plane’s avionics before passengers are allowed to use them during a flight. The reasoning for the policy uses decades old research that concluded that PED’s pose a theoretical threat.

During a Congressional Hearing on the issue in July of 2000, over a year before the first generation of Apple’s iPod was sold, the issue of PED’s impact on a plane’s avionics was discussed. During the hearing a National Aeronautics and Space Administration (NASA) database of anonymously submitted in flight incidents was presented. Of 69,000 reports, 52 flight crews blamed passenger PED’s for the plane’s avionics problems. In most of the cases from 1992 to 1998, incidents on planes as small as a Cessna and large as a Boeing 757, related problems in navigational readings that seemed to be corrected when passengers were asked to turn off the devices.

…In each case the problem could not be duplicated under controlled test conditions…

In several of those cases, the alleged offending PED was purchased from the passenger and attempts were made to reproduce the problem. In each case the problem could not be duplicated under controlled test conditions. These results were fortified by two commissioned studies of PED’s, including cell phones, in 1983-8, (a study for the airlines,) and 1992-6, (a study for Congress.) Both studies offered no real evidence of avionics interference caused by PED’s.

(See Blog article: Why Your iPad Won’t Kill You)

Regardless of the lack of evidence, neither study could prove that PED’s were absolutely incapable of interference, and in a British study on cell phone transmissions, it was determined that the threat from PED’s was from pre-1984 devices that could theoretically cause interference with a plane’s avionics. Despite a lack of real evidence of a threat, the FAA issued its 1993 ruling that said that airlines should restrict the use of all PED’s below 10,000 feet (for takeoffs and landings) and only allow use of PED’s above 10,000 feet if they could prove it didn’t interfere with the plane’s avionics.

The fact is that today’s commercial airliner has been designed with shielding on all electronic systems to protect it against all types of electromagnetic radiation, including a strike from a lightening bolt, which seems far more likely to happen than an incident of electromagnetic interference caused by a PED like an iPod, GPS device, or cell phone*.

(*Interestingly, it was not the FAA, but the Federal Communications Commission (FCC) who issued a rule in 1991, that cell phones could not be used by any aircraft –including private planes and lighter-than-air balloons– because of the fear that phones in a line of sight of multiple cell phone towers could cause problems with ground-based cell phone traffic.)

With the airlines blessing, both the FAA and FCC have created an environment that forces flight attendants to be the voice of ‘Chicken Little’, by enforcing flight rules governing PED’s that make no sense in 2011. The ineptness of the FAA and the airlines in their handling of the issue of PED’s undermines the relationship of trust that passengers must have in the flight crew if they are to be believed and obeyed during critical situations involving a real threat to passenger safety.

The question that remains is whether or not the mythological threat of PED’s to aircraft safety is greater than the loss of trust of the flying public.