It’s virtually impossible to be successful in business today without a strong social media presence. Whether it’s a Facebook page to engage with current and prospective customers, targeted tweets that demonstrate thought leadership, or a corporate LinkedIn page to expand professional networking, you’ve got be online today, because that’s where your audience is—no matter who that audience may be.
Some tradition-bound industries, such as financial services, have been slow to fully embrace the brand-building power of social media, but year after year usage continues to expand. American Century Investments recently released its annual social media adoption survey of financial advisors, brokers and registered investment advisors (RIAs), which documents some of that growth. In this year’s polling, 46% of respondents indicated they had acquired new business last year via social media channels and for half of those it was a win worth $1 million or more. More than half (55%) of financial professionals polled said they are more likely to do business with their social media connections.
The lack of financial literacy is a serious issue in this country, so anything that banks and brokerages do to reach out and help educate American consumers is encouraging. But financial services is a highly-regulated industry, which means firms are limited in what they can do on these platforms.
Practices that are commonplace in other industries that blur the line between advertising and educational information may be prohibited. Many firms have been hesitant to embrace social media because of compliance hassles and what they see as a lack of regulatory clarity on what is allowed. To help clarify some of the dos and don’ts for financial services companies wanting to take full advantage of social media opportunities, The Financial Industry Regulatory Authority (FINRA) recently issued a new set of social media guidelines.
Firms under FINRA supervision need to be careful not only about social media posts they generate themselves, but how they use material from third parties. Comments or posts about a firm’s brand, product or services that the firm has arranged for an “influencer” to post must be labelled as advertisements and identify the source.
Anything the firm re-tweets or re-posts must comply with the same standards as any communications they create. The FINRA guidance states that, “by sharing or linking to specific content, the firm has adopted the content and would be responsible for ensuring that, when read in context with the statements in the originating post, the content complies with the same standards as communications created by, or on behalf of, the firm.”
And if you’re a broker or registered representative with one of these firms, you also have to be careful about sharing the nice things your clients say about you. FINRA has decided that a rep who likes or shares unsolicited favorable comments about themselves is deemed to have adopted the comments and such comments would be subject to FINRA’s communication rules, including the prohibition on misleading or incomplete statements.
In less legalistic language, that means that brokers would be wise to avoid liking or sharing comments that say things like, “Sharon more than doubled the money I invested and can do the same thing for you,” or even something like, “this guy is a financial genius.” The person posting may truly believe such statements, but if the firm or one of its reps shares that comment, the firm is going to be responsible.
Financial services firms, or really any highly-regulated businesses, need to be careful about separating what works on social media and what regulators deem acceptable.
Take emojis, for example. These ubiquitous icons can quickly transmit our emotional state, or just about anything else. (Emoji Dick was a Kickstarter project that translated Melville’s opus about the white whale into emojis.) They can also present problems in the financial world if they are used indiscriminately. While they may be cute, some emojis, like ones showing piles of money, depending on the context as making a promise about investment performance. In the world of investing, that’s always a no-no. And how cutesy do we really want our financial professionals getting?
To avoid getting into trouble with regulators, and to make sure you’re doing all you can to protect your brand and image, it’s imperative to have a company social media policy. If you haven’t already, make sure you write one before anyone on your team sends out another tweet or makes a comment on Facebook.
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