More On Legal & Compliancefrom The Advisor's Professional Library
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
For John Jenkins, president and CEO of Asset Preservation Strategies, and Josh Gilliam, managing director of Gilliam, Mease & Associates, social media is a marketing and branding tool, rather than a way to interact with clients and prospects.
"It's an information gathering tool," Gilliam told AdvisorOne on Tuesday at the Securities America conference. "It's a component of branding and marketing" and a way for advisors to drive clients and prospects to their website. "The website is the hub," he said.
Jenkins (right) uses social media as a way of "mapping clients and prospects." Clients and prospects look at advisors' myriad online profiles before meeting with them, but it works both ways, Jenkins said. By looking at your clients' contacts, you can initiate a referral request; it's easier for the client to say yes if you ask to be introduced to someone by name, while an open-ended request is likely to end with the client drawing a blank.
His firm's Facebook profile is a "static page," Jenkins said. They don't allow comments on the page because they don't have control over them, but having the profile gets the firm "higher up the Google tree."
Compliance plays a major role in shaping Gilliam's and Jenkins' social media strategies.
"Advisors need a good grasp of general compliance issues," Gilliam (left) said. "Then they can look at specific" issues for each platform. Both firms use Smarsh for social media compliance and archiving. "You can't post changes without it going through compliance," Jenkins said, a process that, depending on how complex the post is, could take as much as a day. Simple posts like a check-in at a conference can be approved quickly, while sales and marketing posts may take longer.
One of the drawbacks to that for Gilliam is that you lose the timeliness that makes sites like Twitter and Facebook so appealing to social media consumers. "You're not able to be mobile and capture that moment for followers," he said.
One drawback to Smarsh in particular, Jenkins said, is that currently the service only archives LinkedIn, Facebook and Twitter posts. "The largest search engine, second to Google, is YouTube," he said. "It's coming. It's just a matter of getting their arms around supervising" those posts.
While simple posts like check-ins may not seem to hold much value, Greg Banner, vice president of Asset Preservation Strategies, said they are a way to build credibility. For example, if an advisor checks in at a conference and tweets that he's teaching or speaking, he can build his standing as an expert.
Jenkins takes a "45,000-foot view" of social media and avoids taking too casual a tone in his firm's posts. "I don't want to be quoted out of context six years later," he said.
Gilliam's firm also limits the personal content on social media sites and keeps the tone professinal, he said. He's careful about managing "entertainment" posts because he doesn't want clients to start wondering why he's on Facebook and not managing their money.
However, Banner (right) noted that an advisor's tone may change when talking to clients as opposed to other professionals. "You have to decide who your audience is," he said. He related a story about an asset manager that posted videos from quarterly team building events. That content was far more popular than other messages, Banner said.
For Gilliam, consitency through all aspects of social media, both frequency and message, is one of the most important things for advisors to remember. Jenkins agreed, but added that caution should guide advisors' use of social media. "Post with conviction," he said. "You may have to defend it."