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Mentor RIA Consulting

Allowing you to focus on what you do best

My Blog


Advisers and Social Media

Posted on July 29, 2018 at 10:01 AM
For some time now, advisers have been exhorted to make use and more use of social media. If they don’t, they are told, they will fail and lose clients and potential clients. In response, we have seen an increasing use of social media by advisers, including the recent “authorization” to use Twitter media. All to the good, perhaps, but it may be wise for advisers to exercise a bit of restraint and caution.
First, think about the headlines of late and the increasing number of persons whose statements on Twitter have gotten them fired from a job, deprived of opportunities and castigated by the responses of others on Twitter and other social media. You will want to be careful what you say and Twitter is not set up to force you to take your time and think about what you are saying (or potentially to whom). In most cases, you will want to keep your business comments for your business Twitter account and personal comments – including all of your very smart opinions – for your personal account only.
Related to this is the second point which is to remember that what you put out there is in some fashion permanent. Not only are you required to maintain a complete record of all Twitter (and other social media) activity for your business account, but the regulators will want to be able to examine it at any point in time. So once that easily typed message goes out into the everywhere, you can’t pull it back.
Which brings us to the third point – certain types of statements are forbidden or very limited by regulation of advisers. For example, as an investment adviser, you need to avoid saying anything that resembles a recommendation for someone to purchase a particular security. On the flip side (for example), some regulators consider a Facebook like to be the equivalent of an endorsement of the adviser and so, again, forbidden.
More food for thought might be the understanding that what you put out on social media can reach all kinds of folks, including some you would never have expected or intended to communicate with at all. It may flatter the ego to know that some number of folks are “following” what you say but you might want to remember to be careful about what you do say and make sure statements are clear and not capable of more than one interpretation. Down that road lies more potential for misunderstanding and trouble.
Bottom line: social media can be a good tool for advisers but only if used sensibly.

Categories: Compliance, General, RIA Business

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