How to ensure you are compliant while using social media
Compliance & Sales & Marketing for Professional Services

How to ensure you are compliant while using social media

June 12, 2013

by Tony Vidler

Compliance & social media use for financial advisersRemaining compliant as a financial adviser and not breaching any regulations, whether they concern the provision of best practice advice, privacy constraints, or legal responsibilities to remain within certain boundaries is actually a very simple thing to do.

Do not provide personal advice to clients in a 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 for social media as well.  All the things that advisers are (or should be!) used to having to comply with apply when using social media.

This may seem to be simply stating the obvious, yet it is something that I have been asked about quite a bit.  It is something which is thrown up even more often as a barrier to using social media at all.  This fear of non-compliance for financial advisers is offered as a reason to ignore using the primary method of communication with other humans in the world today.

Here’s what I hear inside my head when I hear advisers offer this reasoning: “you’re saying you’ll stick with a musket thanks…because a rifle sounds dangerous”  

Voice inside my head goes on to say: The safety principles for both are the same…the purpose of the weapon is the same…but the difference in effectiveness is immense…what you are really saying is you haven’t familiarised yourself with the different extra features on the rifle or tried it in a safe environment…it is the learning that intimidates you, not the rifle itself”  images

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.  Musket or rifle…the safety principles remain the same essentially.

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 I shall not run client appreciation events due to my fear of making a compliance slip whilst talking to my clients at a function.

The same principles of good behavior, ethics, and how one provides personalised advice apply regardless of the marketing medium used.

It really is that simple.

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Comments (5)

  • 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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