Social Media Rules for Financial Advisors

These days, you need more than a great website to establish and maintain a solid online presence. 

The fact is, most of your target audiences spend a lot of their time on social media. According to recent studies, most people spend an average of 2 hours a day on social media. In a lot of cases, this represents a significant chunk of their daily Internet usage. If you want to reach out to these potential leads and prospects, you also have to have a strong presence on social media. 

In the past, a lot of financial advisors were wary of possible compliance issues so they didn’t allocate much of their resources to social media management. But nowadays, as everything moves into the digital and virtual realm, financial advisors and asset managers are spending more time and money on social media. They’re creating more content and engaging with their followers on different platforms such as Facebook, Twitter, LinkedIn and even YouTube.

To help you navigate the world of social media, here are some of the basic rules you need to be aware of in order to remain compliant with your marketing efforts.

Business vs Personal Profiles

If you haven’t set up dedicated social media profiles for your business, you should do it now. You shouldn’t be promoting your firm on social media using your personal account. 

Once you’ve set it up, your business profile is going to need to strictly adhere to compliance regulations. Anything you post on your business profiles needs to be approved by your compliance officer or broker-dealer.

Business matters that you discuss with potential clients through your personal profiles can also be subject to compliance. So you have to be careful about what you post on your personal profile as it could be considered a business page once you start actively promoting and marketing your firm through it.

Static Content and Interactive Communications

You don’t need to inform your compliance officer about everything you do on social media. However, everything that’s considered as static content should be approved first before it’s published or posted. 

Static content are the posts and bits of information that stay on your social media profile for a long period of time. 

Interactive communications don’t need to be pre-approved, but still need to be monitored and archived for at least 3 years. This includes your replies to direct messages and comments on your posts. So you need to make sure that the people who handle your social media are aware of the regulatory issues involved.

A good rule of thumb to follow is the idea of fair and balanced communication. When you present information to your audience, it should include all the benefits and risks. Don’t hide the cons in the fine print and avoid making wild projections of future financial performance.

If you follow these basic rules, you’ll always be on the safe side of regulatory compliance. 

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