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Practice Management > Marketing and Communications > Social Media

Financial Advisors and Social Media—Shall We Dance?

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Trying to make strategic sense out of social media leaves financial advisors with a sense of unparalleled confusion and anxiety. I should know. I am one.

All I hear these days is how everyone in the world uses social media networks—Facebook, Twitter, and LinkedIn, in particular—to communicate in an exponentially more efficient manner. And everything seems to be fair game, from the latest photos of the grandkids to up-to-the-second “tweets” of life as it unfolds. The amount of personal, intimate data that people share today isn’t something that we as financial advisors can ignore forever—we just have to figure out how we fit into all this.

I compare it to an awkward first dance in high school. You remember the one: deciding who steps where, hands up, hands down, swaying right or left, holding your breath for four minutes hoping that your date doesn’t see you sweat. Nobody gave you a manual back then on how to dance, and today is hardly different. It was just last year that FINRA released Regulatory Notice 11-39, “Social Media Websites and the Use of Personal Devices for Business Communications,” outlining how firms can use social media.

I’ve been in this business a long time, long enough to produce two college-bound kids and help merge and build a 26-person firm in the thick of a challenging economy. As president of Private Ocean, a wealth management firm in the Bay Area, I spend my days working directly with clients on financial planning and investment strategy. I also run Junxure, a software company based on the East Coast that offers the leading CRM in the industry. I’m passionate about what I do and I understand that technology is a tool that we use to help our clients. How we use that tool determines how successful we are in the long run.

Is anyone really an expert in social media? I set out to answer that question when approaching a social media strategy for Private Ocean. That sent me on a journey of talking to advisors, vendors and compliance attorneys as well as attending a handful of seminars on the subject, and everything came down to one word.


Private Ocean is an independent RIA, so we’re under the regulatory scheme that makes us pretty cautious about sharing information online with our customers using these networks. I’ve seen what other firms do—Raymond James, for example just announced its guidelines on letting advisors use social media, and Research reported in its August issue that technology firms are popping up everywhere to help advisors stay compliant as they begin using social media.

At Private Ocean, what we’ve decided is that it comes down to email.

Basically you use filters for all correspondence, controls and checks and balances so that your firm isn’t dispensing advice publicly or inappropriately. Thinking of social media interaction as email correspondence helps you determine what systems you already have in place for staying compliant. 

Creating a tightly knit communications policy for social media is critical. At Private Ocean, we’re taking that a step further and implementing a system for compliance using a third-party vendor.

Compliance issues aside, there are compelling reasons to start embracing it in your marketing. According to Tim Welsh a CFP himself and president of Nexus Strategy, LLC, a consulting firm to the wealth management industry, “Social media brings advisors another channel to communicate with clients and prospects and can help differentiate your firm in the marketplace. For example, advisors can start by creating a blog on their website to announce firm events, developments and other topics. They can then use Twitter to tweet about the blog post, directing people to your website. This integrated approach is simple, not too time consuming and highlights your firm’s capabilities.”

We recognize that there’s a learning curve. Like a lot of technology, the marketing and hype for social media in the financial industry are far ahead of the audience, and there’s still no concrete evidence of benefits to being an early adopter.

But younger clients don’t communicate the way that their parents do, and in two years or 20, they’ll expect their advisor to be on the same dance card. Let’s just hope by then, someone will have written a manual on how to tweet the two-step.


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