RIAs are increasingly embracing social media sites like LinkedIn and Facebook for marketing purposes despite the compliance challenges, notably compliance with the Securities and Exchange Commission’s “stringent” advertising rule, according to a recent Investment Adviser Association survey.
Relief could be coming, however, as the agency’s head of investment management, Dalia Blass, said earlier this year that she anticipated the IM Division would present “recommendations for a proposal on modernizing the advertising and solicitation rules” for investment advisors soon.
Amending the Advertising Rule (Rule 206(4)-1) and Cash Solicitation Rule (Rule 206(4)-3) under the Advisers Act regarding marketing communications and practices by investment advisors is on the SEC’s short-term regulatory agenda, the Evolution/Revolution report, released in mid-September, notes.
An IAA spokesman told ThinkAdvisor on Friday that the SEC’s fall regulatory regulatory agenda should be published within the next month.
The report, conducted annually by IAA and National Regulatory Services, provides a snapshot of the RIA space. It found that as in 2018, LinkedIn is the preferred social media site for advisors, with almost 40% of all advisers (5,146) reporting at least one LinkedIn page — a 29% increase since 2018.
Consumer-oriented services such as Facebook and Twitter are by far the next most popular platforms among advisors, with Facebook claiming 2,501 advisor users (up 25% from 2018) and Twitter being used by 2,364 advisors (up 22% from 2018), the report states.
“The fact that users are increasing by such sizable numbers indicates that firms, while still generally reluctant, are starting to embrace social media as a necessary element of their marketing strategies, despite the compliance challenges they present,” the report states.