RIA Compliance and Practice Management Blog

Whats Behind the Rise of Twitter for Financial Services

Posted by RIA in a Box

Dec 18, 2014 2:17:00 PM

This is a guest post from Smarsh, originally seen on the Smarsh blog on December 12, 2014.

In 2014, Twitter surpassed Facebook to become the second most popular social media channel among financial services professionals, according to a 2014 Electronic Communications Survey. (LinkedIn remains the most popular channel).

The survey also showed a 10% increase in the number of financial services firms that allow Twitter.

What’s behind the rise of Twitter for firms—and are there specific compliance challenges financial advisors need to be aware of?

Twitter says 45% of its adult account holders interact with financial services firms. Many investment advisors and broker-dealers now use Twitter because they know if they’re not on it, they’re missing out on opportunities to reach new clients and build their business.

Just a few years ago, if a prospect wanted to find out more about your business, they would just visit your website. But now they want to know more than a simple website can offer.

Advisors need a strong social media presence (and often a blog) to drive prospects and clients to helpful content that matters most to them. Twitter is useful to people who are looking for a financial advisor, because they can go through your tweets and discover what your business is about in a few minutes.

That level of immediate transparency helps you attract potential clients who are a good fit for your practice and area of expertise. Your interests and personality, plus engagement with your target audience, can help you build your brand within your specialty.

Twitter can also help amplify everything you already do to market your firm. It can help serve as a channel for your original content—including blog posts, bylined articles in the media, webinars and event promotion. You can also point to your firm’s website and other social media pages, and add images and videos to a tweet.

Twitter can help you connect with people who are usually difficult to reach via more traditional channels, too (for instance, people who would never answer a cold call). As an added bonus, Twitter keeps you current with what’s going on in your industry, and full of fresh ideas for your clients and business.

Make the most of Twitter, but be aware that there are compliance considerations. The SEC and FINRA have specific guidelines around the use of social media, so your business Twitter account needs to reflect the regulators’ recommendations and rules. Points to think about include:

Create a Twitter use policy.

Your firm should have a general social media use policy in place, but go one step further by outlining specific use guidelines for each platform your firm uses, including Twitter. This helps set the framework for your firm’s goals and objectives for every action take on the platform, while you aim to stay compliant with regulations. Know who will be using Twitter to represent your firm, and outline firm expectations, etiquette, and best practices on Twitter. For example, anyone who is approved to use Twitter on behalf of your firm needs to know what type of content can be tweeted, how they can connect with other people and prospects on Twitter, and how they should respond to comments or questions.

Communicate often with your audience.

Your goal on Twitter is to grow your professional network, build new relationships, and attract new business. But you can’t simply tweet at people; you have to engage with them. Make it about them, not you, by sharing information that sparks the interest of your specific audience and market niche. Respond to questions and comments, and talk with people about their content and goals. Create a communications strategy that will guide the type of comments and content that can be used on Twitter, and follow it when interacting with prospects.

Archive and supervise.

You don’t have to submit every tweet to the SEC or FINRA, but you are required to retain and oversee your firm’s social media communications for compliance purposes. There are many different social media archiving options, but look for a solution that can easily capture anything your firm says on Twitter, so tweets (and Twitter profiles) can be reviewed to ensure they follow regulatory rules.

When you offer value to your prospects on Twitter, you might find the platform becomes one of your favorite marketing activities—where you engage and share ideas regularly with your ideal client that they can easily relate to.

And with the right guidelines and archiving tools in place, using Twitter and staying compliant with industry regulations can be a lot easier than you may think.

For more information on Smarsh and RIA in a Box, click here

Topics: RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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