How LA Investment Advisors Manage Social Media Accounts (SlideShare)

How LA Investment Advisors

Manage Social Media Accounts

Courtesy of FPA Technology Services, Inc.

http://www.TechGuideforLAInvestmentAdvisors.com

http://www.techguideforlainvestmentadvisors.com/

Sponsored by


Craig PollackFounder & CEO

Social media accounts

are now an important part

of doing business in the

financial services industry


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40%of the advisors surveyed

said they acquired new clients

through Facebook,


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while 25% used LinkedIn,

and 21% utilized Twitter


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Many financial advisors

in Los Angeles shy away

from social media accounts

because they are concerned

about compliance issues


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While this discretion

is understandable,


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they should also be aware

that the current financial

services rules are surprisingly

flexible when it comes to

effective use of social media


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Regulatory Bodies

and Social Media


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When it comes to social media

accounts,


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FINRA, SIPC, and other

regulatory bodies have not

established new usage rules


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The SEC simply states that an

advisor’s use of social media


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has to comply with the

federal securities laws,

namely recordkeeping,

antifraud, and compliance

requirements


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Business vs. Personal


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As a rule, an advisor’s

personal social media profiles

do not have to be monitored

and archived


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But the situation changes if they

openly discuss business matters


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Recommendations on

Social Media


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Under FINRA rule 2111,

investment advisors need

to have a reasonable basis


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to believe that an investment

recommendation is suitable

for a certain customer based

on that customer’s investment

profile


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It’s a required level of

personalization that cannot be

applied universally to an entire

group of Facebook friends and

Twitter followers,


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so using social media to make

investment recommendations

is not permitted


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For added protection, advisors

should post a disclaimer on

their social media profiles


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saying that none of their posts

should be construed as

investment advice


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Recordkeeping Requirements


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Financial advisory firms are

obligated to keep records of

social media communications

if the contents constitute

business communications


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Like Buttons and the

Testimonials Rule


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According to the SEC,

if a third party uses the ‘like’

button on an advisor’s

social media account,


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it could be construed as a

testimonial if it reflects a client’s

experience with the advisor


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To play it safe, advisors should

refrain from posting anything

that could be called a

testimonial if it is ‘liked’


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and disable the endorsements

section of their LinkedIn profile


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Bottom Line


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Today’s tech-savvy investors

are turning to social media

outlets to make contacts

and manage their portfolios


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LA investment advisors can

and should make use of

LinkedIn, Twitter, and Facebook


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to attract and connect

with clients, provided a few

simple guidelines are observed

along the way


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Does your investment advisor

firm participate in social

media?


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Let us know your thoughts

in the Comments box below


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