How Advisers can remain compliant while using social media
Compliance & Sales & Marketing for Professional Services

How Advisers can remain compliant while using social media

March 12, 2018

by Tony Vidler  CFP logo   CLU logo  ChFC logo

Compliance & social media use for financial advisersThe difficulty of using social media but remaining compliant as a financial adviser and not breaching any regulations seems to be a consistent objection to the use of social media by advisers.  Various aspects of “compliance” are cited: the provision of best practice advice, privacy constraints, or legal responsibilities to a corporate stakeholder, and on it goes…


Yet using social media whilst remaining within the boundaries is actually a very simple thing to do.


Do not provide personal advice to clients in any sort of public forum. Ever.


….there…that was it…it is actually that simple.


The same rules, or guiding principles, that would apply to you when drafting a written advertisement in the local paper work when using social media as well.  All the things that advisers are (or should be!) used to having to do in order to comply with marketing and advertising standards apply when using social media.


The reality is that all the customary things like not using bait advertising, or making false or misleading statements, or breaching privacy, simply extend to any advertising or marketing medium.  No matter whether that is digital marketing or print advertising  the same principles apply regardless.


Using social media does take things a step further in terms of the risk of a compliance breach though.  By its very nature social media involves one-to-one interaction with consumers or clients, and conversations have a habit of naturally getting personal.  That is one of the aspects of using social media which makes it such a powerful engagement tool; the ability to create one-to-one engagement with people that you want to have as clients.


It is highly likely therefore that at some point when using social media the conversation will turn to “what do you think I should do?”


Therein lies the danger.  It FEELS like a personal conversation because it IS a personal conversation, but it is not a structured conversation and the adviser is fundamentally unable to control whether or not that conversation is opened up to other members of the public by the person they are talking to.  Nor is it a secure environment.  Perhaps you are not even talking to a genuine consumer….identity theft is a big thing now after all, and social media is a great place for fraudsters to engage with the unsuspecting to obtain identity details.


So when using social media one has to remember that its purpose is relationship building. It is about engagement and building a degree of empathy or trust.  It is not to be used as an advice-delivery channel.  One remains compliant if we remember

Do not provide personal advice to clients in a public forum. Social Media channels are public forums.


To say that one doesn’t intend to use digital communications as a marketing method for fear of non-compliance is the same as saying that one should not run client appreciation events due to the fear of making a compliance slip whilst talking to the audience.


It is the same deal.


The same principles of good behaviour, ethics, and how one provides personalised advice apply regardless of the marketing medium used.  Take personal advice conversations offline, or out of any public forum, and bring them into the boundaries of the professional advice space.

It really is that simple.


You might also be interested in this related article:
2 Things To Do For Social Media Lead Generation
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Comments (6)

  • Great analogy Tony. Perhaps I can add our observations, too, which place the fear of social media, often not always, into the dealer-induced-fear basket. Certainly in Australia dealers have a way of working on fear of legal repercussions rather than support and education for change. In addition – and this could be trans-Tasman – dealer groups are failing to develop social media policy and to assist advisers to do the same. Some leadership is warranted here.

    Sue Laing - the risk store
    • Thanks Sue – I appreciate your comment and nice words. I think you make an excellent point about who really has the fear of social media….the institutions with a strong desire to control every element of their brand who see distributors as a component only of the institutional brand are often the real problem. Institutions generally on this side of the water are slow adopters of social media, with the notable exception of the big banks out of Oz, but the smaller institutions exercise the same “brand control” on their distributors as you have alluded to.

  • Well, that wasn’t hard. I like your analogy of using a musket to rifle. Hopefully we all learned in English class how to be formal in writing but still informal enough so that the reading is interesting. You’re right, its the same with social media as with a newspaper article. I also like your method of teaching how to be compliant in social media; your advice is straightforward and easy to follow, but if followed, can take care of your doubts. Thanks!

    • Thanks…glad you found it useful. Stick with the basic safety precautions is a simple concept to remember.

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