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

How Advisers can remain compliant while using social media

July 18, 2022

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 seems to be a concerrn cited as a reason to not use social media by those 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 regulatory 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 or for a mailing flyer or anything else 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?”


There is the danger zone.

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.


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 consumers (whether they are existing clients or not) 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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