Financial advisors are increasingly being turning to social media as a way of both marketing themselves and staying in close touch with clients.
The problem is that social media can be a double-edged sword. It certainly helps people stay in touch, but by its very nature, it can also make a professional person too exposed, open people up to scams and harassment, and could -- in the case of financial professionals -- lead to regulatory and compliance issues with regulators like FINRA, the SEC and FSA.
Seeking to address those concerns, linkedFA, a social networking web site designed specifically for financial professionals, announced a strategic relationship with Thomson Reuters, the New York-based business information service, to provide financial data to advisors using the social network.
The site will enable financial advisors and other professionals to offer premium business information to clients while carefully complying with all financial industry rules and regulations. Basic information from Thomson Reuters will be free to members, who can also pay for premium service to access more in-depth information linked to the basic free material.
The two organizations, in announcing their joint project, say the combination will enable financial advisors “to easily find and share industry news, market data, market analysis, and more within their network.”
LinkedFA CEO Jason Bishara says the tie-in with Thomson Reuters means linkedFA members will have the ability “to compliantly share industry-leading financial content and analysis with their networks” not just on linkedFA, but also on Twitter, Facebook and LinkedIn, simultaneously.
Bishara explains that while “you can always have human error,” the linkedFA system has been designed to try to meet compliance needs by archiving all communications for six years and by issuing nightly reports for review, which would be sent to the members’ and compliance officers' email addresses.
“This will enable all communications on linkedFA to go through a post-review process,” he said, adding that profiles can also be pre-reviewed.
Bishara acknowledges that eager as many financial advisors are to make use of social media, many have been skittish about the idea because of concerns about regulatory rules concerning the touting of investments and the possibility of inadvertently providing insider information.
Bishara said much of the concern isn’t really warranted, but has more to do with fears that always accompany the introduction of a new technology. A former financial advisor himself, he recalls that “in the early days,” he wasn’t allowed to use email, because of similar management concerns.
First set up in March, 2010, linkedFA now has 10,000 members, and Bishara predicts that number will reach 80,000 by year’s end.