Is your advisory firm or RIA on Twitter, Facebook, and/or LinkedIn?

It’s likely that your clients are. More than five million investors with $100,000 or more+ of investible assets, according to Cogent Research and LinkedIn, use social media to research their financial decisions. Prospects and clients start their research online:

  • 52% of affluent investors said they would use social media to talk with their financial advisor.

  • 90% of high-net-worth investors are on one or more social media platforms.

  • 46% of investors who use social media don’t have an advisor.

“Although elite advisors didn’t become elite through their use of social media, they recognize the valuable role it can play in their relationship management efforts,” said Matt Oechsli, founder and President of the Oechsli Institute.

If you are an elite advisor, or will be one day, social media may help you reach more of your targeted prospective investors.

Yes, Advisors Can be on Social Media

The rules governing social marketing are stated in two major FINRA notices – FINRA Regulatory Notice 10-06: Guidance on Blogs and Social Networking Web Sites; and FINRA Regulatory Notice 11-39: Social Media, Websites and the Use of Personal Devices for Business Communications.

What does FINRA’s social media guidelines mean to financial advisors and RIAs?

The fine folks from Smarsh, an archiving solutions firm, have develop a white paper “The Financial Advisor’s Guide to Social Media: Regulations, Strategy, and Technology.”

An Executive Summary of “You Must Haves”

The Smarsh report details what advisors must do to be in compliance with social media regulations. Here’s a brief recap of must haves:

1. A written social media policy on file. The policy needs to cover all types of social media and provide guidance about what can and cannot be communicated.

2. A registered principal review proposed social media sites and posts.

3. A training program to educate and periodically train employees on social media policy.

4. An archive social media content for no less than three years, including communications on mobile devices.

5. A policy to be responsible for third party content.

6. A policy that prohibits employees from using a social media platform if it isn’t supervised by the firm.

7. A policy for taking down information posted to social media sites by third parties to ensure compliance with applicable laws and regulations.

8. A procedure to notify employees that social media accounts are the property of the firm.

10. A program to mitigate data security risks and potential exposure to liability related to personal data collection, use, retention and maintenance of records.

11. An audit function to ensure ongoing compliance with internal policies and all applicable laws.

The above list is of course not exhaustive. Again, for more detail, click here for the Smarsh report.

And if you’re looking to incorporate social media into an inbound marketing strategy, check out the complimentary white paper on how to do it: