The (Regulatory) Rules of Social Media

Social media can bring many things to your business: leads, referrals, brand awareness. It's a key way to build relationships with existing and potential clients; however, everything comes with a price. In this case, being active on social media platforms can bring you unwanted attention from regulators. This isn't to say that you shouldn't pursue a social media presence, but remember that social media remains a hot-button issue for regulators in 2012. Numerous alerts have gone out addressing improper conduct by registered reps in the use of social media.

With that in mind, here are some tips to minimize the risk of crossing the line and help prepare you for success. 

Step 1:  Know the rules of the game.

• Contact your broker-dealer to ensure compliance with their social media policy.
• Know the industry regulations:
  • SEC Risk Alert (1/4/2012) – Guidelines for the use of social media
  • FINRA 10-06 – Guidance on blogs and social media websites
  • FINRA 11-39 – Information about social media websites and the use of mobile devices for business communications
  • FINRA Advertising Rules
  • FINRA 2210 – Proposed rule changes on communications with the public (advertising guidelines)
  • SEC Rule 17a-4 & NASD Rule 2210(b) – Record-keeping guidelines
• Archive everything! There are numerous companies that can archive most or all of your social media, blog, and website activities.

Step 2:  Do your research and due diligence.

• Search the internet for other advisor's blogs and read what they are talking about.
• Set up Google Alerts for topics that interest you (i.e. FINRA social media, life insurance, estate planning, financial planning, etc.) 
• Stay up-to-date on industry news and regulation changes that apply to you and your business. 

Step 3:  Pick a platform(s) that meets your business needs.

• Many advisors start with LinkedIn, Facebook, and/or Twitter
• Ensure your existing website is updated, and consider creating a blog (if it makes sense and you can commit the time needed to keep a blog fresh). Social media is the communication engine to build relationships and drive traffic to your website or blog, so you will see increased traffic to your site as you become active on social media.

Step 4:  Build a plan and stick to it.

• Define your ideal client and build your plan to address their needs.
• Be flexible, but don't try to appeal to everyone.
• Position yourself as a resource of information, not a salesperson!

There is not a one-size-fits-all approach to online marketing success, and building a Web presence takes time and patience.  If you're uncertain about what's best for you or need help building a plan, find a coach with substantial experience in online marketing (preferably within the financial services industry). If you play by the rules and keep your clients' and prospects' best interests in mind, you'll be on a path to success in 2012.