ShoeFitts Issues Social Media Policy Guide for Advisers

The aptly-titled white paper, “Best Practices for Financial Services Firms: Rolling Out a Social Media Policy,” includes step-by-step guidance on how to effectively meet client demands for increased social media connectivity. As ShoeFitts president Sheri Fitts explains, the guide should be helpful to the “many advisory firms and broker/dealers [B/Ds] in the financial services industry that are still reluctant to create a social media policy.”

The white paper starts by explaining general social media use and the growing popularity among all age groups, and then covers key federal rules and stipulations, important policy components, guidelines for documentation, archiving and monitoring, plus advisor training suggestions, says Fitts. While compliance concerns are a leading reason that many financial services firms are reluctant to create a policy, Fitts says the lack of a policy is even riskier. “Without a documented policy, firms are still at risk, particularly if advisers are using social media sites without guidance,” she adds.

In fact, Fitts says, advisers are often the ones pushing for some type of formal policy. “Advisers understand this is a people business and know clients and prospects want to make connections on social media,” she says. Indeed, recent industry research from Spectrem Group shows increased overall demand for tech-savvy advising—though individual participants’ interest in things like social media and video conferencing can vary quite a bit based on age, income and other factors.

In addition to summarizing current survey and research information on social media use, the ShoeFitts white paper also includes suggestions from firms that have already rolled out a social media policy. “We wanted firms to hear the implementation steps and important training recommendations that others in the industry have shown to be successful,” says Fitts. The white paper includes pointers from social media experts at The Principal Financial Group, Securities America and LPL Financial.

A joint effort by compliance, legal, sales and marketing staff members is critical for successful social media use, Fitts says. “The best social media policies consider all aspects. The regulatory rules must be paired with a comprehensive understanding of how social media plays into an overall marketing plan,” she adds. The positioning must then include training for social media users with varying skill sets, plus future training and content support.

“While it’s important to have a policy in place, firms must also be prepared to help advisers create and curate content,” Fitts notes. Likewise, she says, social media engagement requires ongoing attention and evaluation. “The rules, the usage, the platforms and the types of content all continue to evolve. This is not a ‘one and done’ project.”

Fitts says her firm is prepared to assist advisers as a training partner on social media use and other communication challenges. ShoeFitts Marketing translates social media, branding, generational issues, business strategy and marketing into manageable steps for clients, their teams and advisers, she adds.

The whitepaper is available here. For additional insights on building an effective and compliant social media program, advisers can review guidance issued by the Securities and Exchange Commission (SEC) in 2012. The guidance discusses regulatory concerns that may arise from use of social media by firms and their associated persons, and offers suggestions for complying with the anti-fraud, compliance and recordkeeping provisions of relevant federal securities laws. The alert notes firms should regularly consider how to implement new compliance programs or revisit their existing programs in the face of rapidly changing technology.