WASHINGTON -- The use of social media within an advisory practice has been the subject of much debate within the industry, but one of the most common arguments for advisors limiting or altogether barring sites like Facebook and YouTube within the firm -- compliance -- might be dramatically overstated.

So argued Michael Kitces, a partner and research director at Pinnacle Advisory Group, in a session on social media in the practice at Schwab's Impact conference.

"I think this fear thing that we have around the compliance of social media has just been ridiculously, egregiously overblown," Kitces said.


Kitces, who has made Twitter and LinkedIn cornerstones of his marketing efforts, argued that for all of the distinctive benefits of social media, the compliance considerations are not fundamentally different from those concerning traditional marketing channels.

"You still have to comply with all of the normal SEC rules around, frankly, any kind of marketing material that you would have to create, but the rest of it pretty much just comes down to don't say the same stuff you would get in trouble with anywhere else you said it," Kitces said.

"Basically anything you can't say to a client directly or on a telephone call or in a networking meeting, you shouldn't say on social media. And anything you can say to a client in a networking meeting and out there in public you can say just fine on social media," he added.

Though Kitces is dismissive of the compliance challenges associated with social media, he acknowledges that firms must take some basic steps, starting with a policy. In that document, firms should stipulate what platforms they plan to use, who can post content, and what types of materials will be reviewed by a principal before publication.

There are also archiving responsibilities to consider, though there are numerous services that can generate a complete catalog of all the content that advisors create on social platforms.


Once those policies are set and the necessary technical applications are in place, of course, firms must then craft a strategy for marketing through social media sites that is likely to resonate with their clients and prospects.

Catherine Maniscalco Avery, president and chief executive of Catherine Avery Investment Management, suggested that advisors consider what types of social sites their prospective clients are likely to use, as well as the platforms that they, the advisors, are comfortable posting on. She also suggests that firms take a page from their own book and draft a social media plan that includes some of the same mile markers -- objectives, time horizon, etc. -- that are the hallmarks of the plans advisors develop for clients. At Avery's firm, she and her team work by an editorial calendar where they block out various topics that they want to cover in their social media postings each month.

Social media marketers broadly agree that the medium is not a channel well suited for direct sales. Instead, they'll point to goals like building brand awareness, audience engagement and influence.

In the advisor space, social content like blogs, videos and podcasts can help establish a firm's expertise, while offering up thoughtful content that investors might use to advance their financial strategies.

"In this business the trust factor's very important," Avery said. "Education is a really big part of our thesis in terms of social media. We want to educate them so we can be seen as a resource."

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