Over the past few years, social media has played an important role in the wealth management industry’s marketing efforts, presenting opportunities for advisors to attract new clients and keep up with existing ones.
By being active and posting regularly on the various social media channels, advisors are able to directly communicate with their clients, and present themselves as competent stewards of their hard-earned money. But as with any area of advertising, social media comes with compliance concerns, including archiving.
In this article we’ll explore how advisors take advantage of the opportunities social media provides, while also fulfilling their compliance requirements.
Why Should I Be Active on Social Media?
Social media is no longer only for young people. According to Pew Research Center, 70% of US adults are active on social media. And while younger generations were earlier adopters, older generations are catching up. Forty-five percent of Americans 65 years and older are active on at least one social media platform and 73% of those 50-64. In short, advisors should be active on social media because their clients and prospective clients are active on social media.
One reason advisors may be hesitant to devote resources to social media is because they want a clearer ROI. Social media often lacks the immediate and direct response in sales of some other forms of advertising, but that doesn’t mean it’s not valuable. A well-crafted social media strategy is an important part of any advisors marketing plan. Social media provides opportunities to build brand awareness, connect more directly with both clients and prospective clients, and build credibility.
But as with any form of marketing, not every strategy is a good strategy. The key to successful implementation of a strategy is intentionality.
- Which platforms are a good fit? You don’t need (or want) to be on every possible platform.
- What separates you from the competition? Share content that highlights your unique knowledge and experience.
- What is the brand image you wish to portray? How will your social media highlight this?
- What different kinds of content will you share? Include some variety to keep your posts more engaging.
The other reason advisors may be holding back from actively engaging in social media is due to concerns regarding compliance. While compliance is something that must be addressed, it’s no reason to miss out on all the benefits social media can provide. The first step to remaining compliant is knowing exactly what’s expected.
What Are the SEC and FINRA Requirements for Social Media?
Here we will cover some of the key requirements for social media, but compliance is complex, and advisors should always review any issues or concerns with their compliance personnel.
The biggest thing to keep in mind when creating content for social media is that it’s a form of advertising and as such, the same rules that apply to any other form of advertising also apply to social media. If you couldn’t put it on your website or in your marketing materials, you can’t put it on social media.
Though the rules are the same, the application of those rules isn’t always clear cut. Social media is still new, and regulators have struggled to apply the rules in such a way that aligns with this new form of marketing.
For example, in December of 2020, the SEC released its much anticipated new Investment Advisor Marketing Rule. The rule went into effect on May 4, 2021, though compliance action will not begin until November 4th, 2021.
Prior to the new marketing rule, advisors could not include testimonials. The rule addressed the changing nature of how people use and interact with companies online and updated these rules so that advisors can now include testimonials from clients, including both reviews and referrals. To avoid having these be misleading, compensation for the testimonial or any conflicts must be disclosed. This brings the SEC guidelines more in line with those of FINRA, which also allows firms to share testimonials, as long as the firm discloses if the individual providing the testimonial was compensated.
The other area that applies to social media, just like any other form of advertising, is recordkeeping. Both the SEC and FINRA have rules that require advisors to keep records of their advertising. In practice, this means advisors must find ways to archive their social media.
What Happens if I Don’t Archive My Social Media Posts?
Advisors who don’t archive their social media posts are in violation of their recordkeeping requirements. In other words, they’re not in compliance.
Both the good and the bad news, depending on how you choose to look at it, is that there’s not one specific consequence for advisors not in compliance. If the SEC were to conduct an exam and audit your firm, the consequences could vary. You could receive a deficiency, which does not come with any fines or penalties, or the auditor in charge of your exam could choose to make an example of you and fine you heavily. While the latter is less likely, it’s possible, and taking on the extra risk when there are such simple solutions makes little sense.
Regardless of the consequences, staying in compliance is always your best bet. Finance is a heavily regulated industry, and while this may add additional burdens on the vast majority of advisors who work in their clients’ best interests, the industry does have bad actors too. Sadly, regulations are necessary in order to keep the handful of bad actors from harming their clients.
What Social Media Channels Can I Archive?
Just as advisors must archive their website and emails, they must also archive their social media. But “social media” covers a wide range of platforms and content. What exactly should advisors archive?
The short answer is pretty much everything. Remember, everything you put on social media is an advertisement, and advertisements require that you keep records of them.
The good news is that you can archive content from any social media platform. The other thing advisors will want to keep in mind is that it’s not just posts on social media that require archiving, any comments are also part of their advertising and therefore require archiving.
Is Presults Right for You?
Now that we’ve covered what advisors need to do, now we’ll consider how they can go about doing it. Many advisors have heard of some of the larger names in archiving, but plenty of other options also exist, including Presults.
• Included for free with email archiving
As we’ve seen, while email archiving is important, so is social media archiving. Many other archiving platforms have a basic package that includes only email archiving with additional fees for archiving your website or any social media sites. That’s not the case with Presults. Presults includes both website and social media archiving in its basic package.
• Monitor Emails Before They’re Sent
Most archiving solutions allow you to flag for keywords in outgoing emails, but they do so only after the email has been sent. While this is better than nothing, it means you’re addressing issues instead of keeping them from happening. Presults is different.
Presults allows advisors to monitor emails with potentially non-complaint emails before they’re sent. The advisor simply needs to include a list of keywords to flag, and every outgoing email is auto swept and flagged. Not only does this help address issues before they arise, but it also eases the burden of email review.
• Pricing
Everyone wants a fair price, but for smaller advisors the costs of remaining compliant may prove especially challenging. Additionally, many larger archivers force advisors into long-term contracts, which may not be a good fit for the advisor.
Presults understands the value of flexibility and believes in retaining customers by providing a valuable product and excellent customer service, not long contracts that are difficult to get out of. Presults offers a month-to-month subscription that includes email, social media, and website archiving starting at under $100 per month.
• Built specifically for advisors
Many industries have recordkeeping requirements, but advisors have unique needs. That’s why Presults was specifically built with the specific requirements of advisors in mind. Furthermore, as the regulatory landscape continues to evolve, Presults will continue to offer services that help advisors meet their needs.
With the needs of advisors in mind, in addition to its comprehensive base package, Presults also offers add-on features that help meet the needs of advisors, including email encryption, client personal information protection (such as SSNs and DOBs), and tone detection, which can provide a warning when conversations are becoming too heated.
The Takeaway
Social media provides new ways for advisors to engage with existing clients and build brand recognition with prospective clients. Compliance concerns shouldn’t keep you from taking advantage of this potential opportunity. Cost effective, user friendly options such as Presults can help you engage in social media while remaining compliant.
