August 17, 2012 / 2:05 PM / 6 years ago

YOUR PRACTICE-Working around your firm's ban on social media

Aug 17 (Reuters) - Financial advisers whose employers do not let them use social media sites for business can still benefit from setting up personal profiles, according to a new book.

Advisers can use LinkedIn, Twitter and Facebook to find potential clients, keep up name recognition among acquaintances and watch competitors, write Matthew Halloran and Crystal Thies in “The Social Media Handbook for Financial Advisers.” Both authors are consultants to advisers.

This personal-use strategy could help advisers at firms like Merrill Lynch Wealth Management and Wells Fargo Advisors , which restrict advisers from social media sites for business use, outside of pilot programs.

Of course, even with personal use, there can be professional pitfalls.

“There is a fine line between personal and professional these days - it moves to professional so easily,” said Lauren Boyman, director of digital strategy for Morgan Stanley Smith Barney .

Morgan Stanley Smith Barney and Raymond James Financial are among the big wealth management firms that allow advisers to access several social media sites for business use, with certain restrictions.

Advisers who keep personal social media profiles should be extremely careful about what they say in their profile and postings, Boyman said, since they could run into compliance issues.

Advisers can use social media archiving services, like Erado and SocialVolt, to record what they do on the sites for protection in case of legal problems.

Using social media in strictly personal ways also has limitations, said practice management consultant Mike Byrnes, the president of Boston-based Byrnes Consulting LLC.

Advisers will be missing out on some core benefits of the sites, from being able to establish themselves as experts to driving people to their websites, he said.

Halloran and Thies spoke with Reuters about their book, which is billed as a how-to guide for using LinkedIn, Facebook and Twitter. Edited excerpts follow.

Q: Many advisers assume that if their firm bans them from using social media for business, then it’s worthless. Your response?

Thies: Actually, sometimes it can give you even more freedom because the people you’re interacting with don’t think you have ulterior motives. The power of social media is the ability to build relationships. You can do that without advertising yourself as a financial adviser.

Q: What are specific ways personal profiles can help an adviser’s business?

Thies: Normally you’re dependent on your clients to come up with referrals, but with LinkedIn and Facebook, you can pick out specific people you want to be introduced to.

You can also use your profiles to help connect and promote people in your network by doing things like commenting, liking and retweeting. Later, if someone asks them about a financial adviser, even if they know five of them, the one they’re going to recommend is you. You’re going to be front of mind.

Q: Can the profile hint at what they do for a living?

Thies: You can identify yourself as, say, a financial professional working at an undisclosed company. But some firms may not even approve of this, so review your compliance policy. If you want to play it really safe, identify yourself through other roles you have, such as your leadership role at a nonprofit organization or your second job.

Halloran: But make sure that you’ve let regulators know about your other business activities before you list them on your social media profile.

Q: You write that personal profiles can help you keep an eye on competitors. Isn’t most of what they post going to be fluff?

Halloran: I can find out who’s following you, which can be a potentially rich prospect base.

Q: Are you saying you can try to steal clients from them?

Halloran: It’s important for you to know what circles your competitors are running in. If you see that they are connected to a lot of people who have say, Verizon, in their title, I think that’s very important.

Do I think you should be stealing other people’s clients? If you know an adviser is saying wildly negligent and untrue things on these sites - absolutely.

Q: Should you tell your firm that you’re using social media for personal purposes?

Halloran: I wouldn’t. I think it’s important for you to have some separation there. You might have some views your firm doesn’t necessarily need to know about, like about politics. I still cling to the hope of privacy.

Q: What do you say to advisers who think social media isn’t worth the effort and risk?

Thies: I’ve stopped arm-twisting. If your business is growing fine, you may not need social media.

Matthew Halloran is president of Top Advisor Coaching, and Crystal Thies is chief executive officer of Crystal Clear Buzz, a social media consultancy specializing in LinkedIn.

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