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Social Media: Marketing Friend or Compliance Foe?

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Social media seems to beeverywhere these days. As a recent study published by Financial Planningmagazine shows, just over half of advisors are using social media likeFacebook, Twitter and LinkedIn in both their personal and professional lives.According AdvisorOne, nine percent of all LinkedIn users are in the financialindustry. However, with compliance concerns on the rise, it can be difficult toknow what you can post and what you cannot. An increasing number of firms arecreating policies on the use of social media, but many are still nervous aboututilizing these methods to obtain clients and market themselves. There are no“hard-and-fast” rules, but here are some general guidelines to abide by:

  • RecordEverything—FINRA recently toned down its filing requirements regardingsocial media, but this does not mean that they won’t examine your posts. As anadvisor, you’re used to keeping proper documentation, and this does not stopwhen you get to social media websites. Recording also helps you to keep trackof what you have and have not put online so you don’t repost the same articleor message.
  • Determinethe Level of Involvement—It can be difficult to decide whether your firmshould obtain a Facebook page or not, or whether each advisor in the firm isexpected to maintain a professional profile. Keep in mind, the more peopleinvolved, the more monitoring that needs to be done and the greater thepotential for compliance violations.
  • Discoverthe Benefits of Social Media—Will social media help you to obtain prospectsor will it consume your time without any results? In our experience, LinkedInis particularly helpful in obtaining clients (if properly optimized),but it really depends on your practice.
  • SeparateBusiness and Personal Accounts—This may seem like an easy one, but it isone of the most important principles to follow. If you, an employee or otheradvisor in your firm posts something work-related on their personal socialmedia page, it can result in the same consequences as if they posted it ontheir work profile. Once something is posted, even if deleted, it was stillthere and could have been seen by a client or prospect. Make sure that everyonein the firm knows how to strictly maintain these boundaries.
  • OpenAccounts, but Don’t Post—If you’re worried about compliance but still wantto get involved in social media, go ahead and join. If you don’t post anythingbut instead use the accounts to keep up-to-date on your clients’ lives, you canstill enjoy the benefits of social media websites. By having a LinkedIn,Facebook, or Twitter, you can see when John Doe finds a new job or when Janeand Chris Smith have a baby. This way you can preempt their questions about 401(k)rollovers and college savings accounts by sending them congratulatory emailsand asking them if you can be of any assistance.

Social media can be a great toolfor advisors, if used properly, but the compliance worries associated with itcan scare away many in the retirement industry. By following some guidelines,you can avoid compliance problems while gaining a great ally in the age oftechnology.

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