Registered investment advisors have a competitive advantage over wirehouses and independent broker-dealers when it comes to leveraging social media, said participants in a panel discussion at last week’s Schwab IMPACT Conference. Larger organizations face greater challenges when it comes to implementing compliance policies due to more bureaucratic structures, they explained. RIAs should devise strategies for entering social media before wirehouses and broker-dealers catch up, participants recommended.
Social media delivers a positive return on investment, noted Mike Byrnes, president of Byrnes Consulting, pointing out that it is inexpensive, educational and searchable. An important piece of social media jargon is search engine optimization, or improving the visibility of a website in search engines via unpaid search results, Byrnes said. That means social media activities help advisors’ web sites rank higher on Google, Yahoo! and Microsoft’s Bing, he explained.
“Although social media sites present a number of compliance challenges, these obstacles are surmountable, and the sites remain important outlets for investment advisors,” said Daniel Bernstein, director of professional services at MarketCounsel.
The rules that impact an advisor’s use of social media are related to advertising and record retention. The Securities and Exchange Commission has not provided any specific guidance, but in February it conducted a sweep of advisors to gather information about their use of social media (FII, 2/18). The sweep gave a hint of the areas of SEC concern: policies and procedures, staff training and retention of social media-related records.
Advisors should consider social media archiving services to automate the capture and retention of social media messages for compliance purposes, recommended Bill Winterberg, a columnist with FP Pad, a financial planning technology blog. Some sites he recommended are: www.arkovi.com, www.socialware.com, www.erado.com, www.smarsh.com and www.actiance.com.