10 social media marketing challenges that only Financial Advisors would understand.
Financial Advisors Face Special Challenges When They Use Social Media To Grow Their Businesses
SO….You’re determined to grow your financial advisory business faster. You feel that you have milked as much growth as you can from the “old school” client acquisition methods. Besides…. prospecting for clients from your personal network gobbles up way too much time already and takes away from important things like family and client service.
Admit it. It’s becoming harder and harder to ignore the internet and social media as a source of new clients. The latest figures say that 43% of people aged 65+ years are on Facebook. Two thirds of people aged 50–64 are on Facebook. Facebook looks like a “gold mine” of prospective clients for Financial Advisors.
Ready to take the plunge? Your Facebook business page is free. Grab a “head shot” and your Firm’s logo. Just follow the easy directions for set-up and you are in business in no time. You can increase your reach by inviting your friends and clients to “Like’ your page. Reach through friends networks to their friends. Post or blog as often as you want about you and your services and products. Have your clients say nice things about you and provide testimonials. Promote your insurance business too.
Isn’t this great? NOT SO FAST!!
The Financial Services Industry is one of the most regulated industries in the United States. Communications with the public are the most regulated part of the industry. If you don’t want to crash and burn, you should understand these 10 things before launching into social media marketing:
1 — Financial Advisors work in a self-policing industry and the police chief’s name is FINRA(Financial Industry Regulatory Authority) . FINRA is an organization with over 3,000 employees whose mission is to protect your clients and prospective clients.
2 — FINRA Rule 2210 establishes standards for the content, approval, recordkeeping and filing of communications with FINRA for most communications with the public. It is safest to assume that everything associated with a financial advisor’s social media presence is either retail communication or correspondence and governed by Rule 2210.
3 — In the world of social media, content is king and audience engagement is the goal. Engaging content moves beyond the simple “buy from us” messaging. Audience engagement involves offering educational, informative, entertaining or provocative information in an attractive format so that people who encounter your post or ad will click on it. But formulating or selecting content to be presented is tricky business. There are a number of FINRA rules that require your content must:
be fair and balanced
not contain false, exaggerated or misleading statements
not contain predictions or projections
be written specifically for the audience that receives it
provide a thorough explanation of all considerations and assumptions underlying
follow many other additional rules
Financial advisors will need a lot of help sourcing and determining what content is presented in their social media marketing activities.
4 — The Office of Supervisory Jurisdiction(OSJ) is your friend — Following the rules and staying in compliance is each financial advisor’s responsibility. You should look to your Firm and branch OSJ manager for help and guidance . Many firms offer social media training on line. Becoming familiar with your Firm’s and OSJ’s policies and procedures along with the people who are responsible to monitor and maintain compliance is a key first step in any financial advisor’s social media marketing strategy. Be aware that social media marketing is still a relatively new channel for business growth in the Financial Advisory business. As a result, many firms and OSJ’s are still in the process of completing their social media compliance processes and procedures. Patience may be required.
5 — Time Delay — Approval is required. — Virtually everything that you communicate via social media will be subject to some type of approval, review and surveillance. Most items will involve approval by your OSJ branch manager, while certain communications may need to be submitted to FINRA for approval. The approval process timeframes range from days to weeks depending on the number of iterations. Remember that emails are also communications subject to FINRA rules and may require approval by your OSJ.
6 — Getting Noticed — Social media engagement(click/like/share/comment) is often much higher when the communication is humanized or personalized. Videos create much higher engagement rates Vs. static pictures or text. OSJ approval for videos could include pre-approval of the manuscript, submission of complete video along with screen shots and final manuscript. Creating original content in general is tricky business and probably should be minimized or avoided in the Financial Advisor’s social media strategy. Content regarding personal life, involvement in church or community events, support for charities or social causes may be a source of original content that can be presented without pre-approval BUT your OSJ’s policies should be confirmed.
7 –It’s already approved- Many firms produce or subscribe content that is pre-approved. Product sponsor firms also provide material that has a “clean” FINRA letter meaning that it is has been reviewed by FINRA and deemed consistent with advertising rules. Firms typically make this content available electronically through a portal. Pre-approved content can generally be posted without any further approval. Other subscription services are available to financial advisors. Confirming OSJ policies prior to posting is recommended in all cases.
8 — Curate your way to success — By far, the most frequent posts to social media sites like Facebook and LinkedIn are what are known as curated posts. Social curation involves sharing Web content organized around one or more particular themes or topics. Curation is done by sharing links to websites of interest. Think of your firm’s member portal as a curation website. Curation of your firm’s pre-approved social media content is probably the best strategy today for Financial Advisors.
9 — You are being watched — FINRA rules make social media marketing more difficult for Financial Advisors and they are no picnic for your firm and OSJ branch. In addition to pre-approving all content, OSJ’s must also monitor postings and members’ social media pages. This responsibility added to timely monitoring and review of all correspondence including emails on a timely basis creates a significant administrative burden on your OSJ. In order to avoid being crushed, firms are using automation to support the process. As a result, Financial Advisors are finding that they may only access social media by way of their OSJs, surveillance tools. Familiarization and access to your OSJ’s surveillance systems is another key first step in any financial advisor’s social media marketing strategy.
10 — Launch with Facebook — Once you have sorted through the compliance and surveillance red tape, it’s time to start growing using social media marketing. Facebook overall offers the best audience of prospective new clients to grow your Financial Advisory business. Most OSJ’s frown upon using your personal Facebook page to promote your financial advisory business. Creating a page for your business is free and relatively easy. There are some special considerations in setting up your business page:
The “About” section will need to include disclosures and links related to Broker Dealer Disclosure and Registered Branch information. You will also need links back to FINRA, SIPC and an approved website(either yours or the Firm’s)
Messenger and recommendation capabilities must be turned off
All notifications, email or comments need to be forwarded to your official Firm account
Receiving “Likes” for your page is a good thing because it extends the reach of your posts and can be used in audience targeting for your ads or boosted posts. Your OSJ may want you to include a statement on your page indicating that “Likes” should not be interpreted as endorsements or testimonials.
It is probably a safe practice for Financial Advisors to avoid clicking “Likes” or “Shares” when viewing other investment industry related content while using social media for their own account.
It is not currently possible to prevent posts by third parties to your Facebook page. Most posts by others should be removed promptly. Any follow-up communication triggered by your social media presence, like prospective new clients, should occur on your OSJ’s official email or telephone systems.
You will want to invite your friends to like your page and encourage them to invite their friends. An OSJ approved email to existing clients announcing your Facebook page and inviting them to “Like” your page is also another free way to get more people to see your posts and notice you.
Entering the world of Facebook advertising to grow your business is a subject for another blog post.
Conclusion
Social media offers an exciting opportunity to accelerate your business growth by augmenting traditional prospecting activities with an automated and leveraged model (one to many) that attracts new clients.
Social media can seem like a lawless and untamed frontier that offers a rich source of new clients. It is far from that for Financial Advisors.
Note: The information in this blog post is intended to familiarize you with some of the key considerations that Financial Advisors should know before launching a social media marketing strategy. It is not a complete analysis and there is no legal advice included. Social media marketing plans should always start with your OSJ Branch manager and execution should be in compliance with Firm policies and procedures.
About the author:
Rich Ryan launched REVEXEL™ to help sole proprietors and small business enterprises accelerate growth by using social media affordably and without investing time to figure it out themselves.
Rich is a “digital refugee” enjoying the journey riding on the back of technology. As a “baby boomer” with a past life in “big time consulting”, technology-driven disruptions have turned out to be a source of great opportunity and adventure for him. You can reach him at richard.ryan@revexel.com
