Strategi recently undertook an analysis of this media from a financial adviser compliance perspective and the results were alarming (based upon those sites where access could be obtained). Advisers in their day-to-day conventional marketing are mindful of compliance issues such as disclosure statements, providing a warning when providing class advice, not being misleading or deceptive with advertising, but when it comes to the social media sites visited by Strategi, this natural caution was thrown to the wind. In most instances, the adviser was communicating like any member of the public and providing comments that a financial adviser and in particular an AFA should not be publically making without the appropriate disclaimers and or warnings.
As the popularity of these sites grow and as advisers encourage more clients or others to follow their comments and blogs, then they are widening their circle of influence which is great from a marketing perspective. However, many advisers forget that it is not a one-on-one communication medium and it becomes a one-to-many communication. Providing comment may effectively be class advice, however subsequently answering specific queries for an individual may become personalised advice and all the normal compliance processes need to be followed. Disclosure statements should be available, have a very clear cut off between class and personalised advice, be very careful on providing investment returns without appropriate explanation etc.
Strategi has recently added financial adviser social media sites to its Best Practice compliance review process and these will now be regularly reviewed for Strategi clients.
Don’t be discouraged by the compliance issues. Social media does have a role to play for financial advisers. If it is to be used as a marketing tool, then obtain compliance signoff and list in your ABS or operations manual the compliance process you are using to monitor it.
Strategi believes social media has a greater part to play for the average adviser in a ‘listening’ role. Use social media to listen to key people but the trick is to identify the right people to listen to. Try starting with:
- Listen to your clients and prospects
- Listen to thought leaders- especially those from offshore.
- Listen to fellow financial advisers
Listen to your clients or prospects
By listening to your own clients or prospects, you will gain valuable insights into how they are currently thinking, what their issues are, and potential opportunities for you and your business.
Listen to thought leaders
Some of the industry’s brightest international thought leaders and product suppliers are found on Twitter. Use social media to push to you their news and information rather than you have to go and spend time seeking it out.
Listen to fellow financial advisers
This is a great way to find out what your peers, both in New Zealand and overseas, are doing and thinking. It provides a very practical view on what the thought leaders may be espousing. However, avoid wasting time following Twitter or Facebook comments from those who seem to complain and rubbish things. Find those who analyse the issues facing advisers and provide good solutions to problems that you may currently already be facing.
Summary
By using social media to just ‘listen’ and not making comment, you are avoiding all the compliance hassles and simultaneously, you are potentially gaining access to valuable ideas, opportunities and trends. However, select who you follow carefully otherwise the potential to waste time can be huge.
