The Compliance Conundrum: Unlocking Social Media’s Potential for Wealth Management

compliance sign

Last week, BDI held its’ annual Social Media in Wealth Management Leadership Forum in New York. The event brought together thought leaders in the industry who shared best practices for enabling financial advisors to use Social Media platforms to connect with prospects and clients.

Not surprisingly, compliance is seen as a major obstacle in social integration. This is especially daunting when you consider that, for many firms, this means thousands of financial advisors going social at once. FINRA and SEC offer little in the way of clear guidance. The good news is there are many platforms available now, such as Actiance, that offer protection — blocking tweets, re-tweets and posts with inappropriate, or illegal, information and protecting against malware and viruses. As many speakers professed during the conference, the right technology combined with proper employee training is enough for many wealth management firms to feel comfortable pursuing a social media strategy.

So, where to start? One key insight that came out of the conference was the importance of getting all relevant stakeholders involved in developing the social media program – including marketing, HR and legal. Engaging these groups early on in the process will ensure buy-in later on. The conference also highlighted many wealth management firms that began their social media activities with a pilot program. Morgan Stanley Smith Barney, for example, began a Twitter Pilot Program, where all tweets were pre-approved by their legal department. Starting small and slow allows you to test out your strategy, both for compliance and effectiveness, before going full force. For companies with especially reluctant legal departments, a pilot program may be just the ammunition you need to prove the value of the program and the true level of risk.

It is understandable that many wealth management firms are fearful of engaging in social platforms, however with the right guidance and preparation, it can prove to be an effective way to expand your brand, increase visibility and engage prospects.

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