Updated Friday, August 1, 2014 as of 10:01 AM ET
How to Craft a Social Media Policy
Tuesday, April 15, 2014
Partner Insights

Social media is undoubtedly the platform for advisors to use to reach affluent investors and potential customers. However, ‘turning on’ social media for wealth management firms is not as straightforward as flipping a switch.

Navigating through the myriad requirements from regulators, federal bodies and state laws before embarking on any social media program is a must. After all, failure to comply could lead to expensive sanctions, negative publicity and even a vote of no-confidence from existing customers.

From the outset, firms should consider which employees might want to use social media, how they would need to use it and how best to ensure that their use would be compliant with industry regulations like FINRA Regulatory Notices 10-06, 11-36 and 12-29.


Financial advisors are motivated to use social media to prospect for business. In fact, three out of four advisors are already using at least one social network for business, according to a recent study from LinkedIn. Out of that group, 32% of those on LinkedIn have used social to bring in $1 million or more in assets under management.

Despite the high rate of adoption, firms should still consider rolling out social media in stages, providing training on the corporate social media policy and using real-world scenarios and use cases to nurture advisors to be confident, successful and compliant in their use of social media.

For instance, a first step could see advisors being allowed to access social media in ‘read-only’ mode. Even without actively participating, there are still benefits for advisors. For example, a senior advisor whose firm had provided ‘read-only’ access noticed that a connection on LinkedIn had retired. He phoned and offered his congratulations and found out that his connection had been saving for years without the help of an advisor and had nearly $3 million in a 401K plan, individual stocks, bonds and annuities. Over the course of several in-person meetings, the advisor secured a new client – all because he became aware of a major ‘money-in-motion event’ on social media and acted on it.


Supervision is a cornerstone of complying with FINRA, which requires "evidence" that firms are supervising communications. Failure to supervise is a major regulatory risk for firms that create processes that are not followed or policies that are unenforceable.

Technology solutions such as HNW and Earthintegrate enable social media campaigns to be easily created and executed and help advisors build lasting relationships on social media. However, whether advisors are accessing social media sites directly or via third-party tools, firms should ensure that any social media communications are properly supervised.

Firms may want to investigate technology that can provide oversight of social media communications. Technology can be used to monitor communications and automatically stop messages from being posted if, for instance, certain keywords have been used in the message, until a review can be carried out by a more senior member of staff.


According to a LinkedIn study, more mass affluent consumers than ever before are using social media to research available options for financial products and services before taking action, making social media an important tenet of a marketing strategy for any wealth management firm.

To be most effective, marketing departments should ensure that corporate Facebook, LinkedIn and Twitter accounts never fall silent. They should publish timely answers to questions posed by customers on social media and they should monitor, measure and analyze comments, posts and updates made to ensure the investment in social media is yielding results for the business.

Shoutlet and Spredfast are two popular, enterprise level social marketing tools that enable marketing departments to leverage social media as part of a wider communications program. If a firm’s marketing team is using tools like these to access social media, then they must also ensure that this access is supervised and all communications are retained in accordance with the record keeping requirements set out by regulators.


The use of social media is not confined to any one group within an organization and not every employee within the firm might want to use social media in the same way. However, the regulations set out by FINRA, the SEC and other regulatory bodies apply to all communications posted by firms, whether it is from the corporate account or the employee’s own account. This is an important consideration for firms when implementing their social media strategies.

A study from SilkRoad Technologies found that 75% of respondents used social media for work. And of course, examples of employees at various levels of the organization taking social media into their own hands with disastrous consequences have also been well documented.

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