SEC crashes social media party

Posted: April 4, 2013 in Uncategorized
Tags: , , , , ,

When the federal Securities and Exchange Commission gave permission for corporations to disclose market-moving material on social media platforms, it finally fully legitimized a mode of communication that’s become routine for millions of business and casual users. So if you’re a financial advisor who isn’t using social media or who is just dabbling, realize that when the SEC arrives at a party and you’re not there yet, the party may be nearly over.

Ok, maybe I’m exaggerating…a bit. My point is that when glacially-slow moving federal regulators are moved to bless a method of communications, it means that pretty much everyone else is already there.

All too many financial advisors have freely used the fig leaf of compliance (read the SEC and FINRA) to explain their absence from social media. And really, there hasn’t been much excuse in the past few years as FINRA and the SEC have issued more guidance about social media. Now there is none. 

There are a lot of reasons why financial advisors need to be on social media, I won’t go into all of them today. What I will offer is that there is an opportunity cost to NOT being there. Today’s savvy high net worth individual — very likely your potential client — isn’t going to meekly show up in your office in response to a referral from a friend and turn over all their assets to you. 

No, that individual — in possession of a referral to you — will seek to do some due diligence before contacting you. That due diligence will likely include a simple Google search, which is usually informative and revealing. If that Google search shows links to an attractive, focused website, presence on major social media platforms and thought leadership on topics of interest to that individual, a phone call or an e-mail to you may very well follow, which could lead to a client relationship.

If instead it leads to an outdated, clunky website, no social media or sketchy social media (an abandoned egg profile on Twitter, perhaps) and outdated links, that call or e-mail may not come.

Look, I’m not saying social media is the sole reason that clients will sign on with you. I’m saying that by not engaging with potential clients in the arenas where they are gathering information and poised to gather more (re the SEC’s announcement), you’re leaving yourself vulnerable to the competition and giving potential clients an excuse NOT to engage with you.

In this day and age of increasing competition in the financial advisory space and commoditization of financial advisory services, it behooves you not to give them one. 

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