It's so easy to get carried away on social media. The concept of putting out an idea that can be viewed and shared by hundreds, maybe thousands, is exciting.
I always advocate responsible social media use, which really isn't all that hard. Consider social media to be an extension of a public speech or seminar you give. Understand that everything you put out there can be seen by your next client, your grandmother's best friend, or maybe even your grandmother. Showcase the best you have to offer on your personal and professional pages and be sure to keep them separate.
Regulatory Agencies Will Monitor for Accuracy and Honesty
When you're posting for professional purposes, you can't be too careful, particularly if your business provides advice like lawyers or financial advisors. Here, you've got to be really careful to remain pleasant, authoritative in tone, and accurate. Resist the urge to exaggerate or paint an overly optimistic picture. Encourage people to contact you directly "for more details."
I was reminded of this a couple of months ago when I came across a tweet that said financial advisors could face penalties from the Securities and Exchange Commission (SEC) if they don't delete misleading social media posts. I clicked on the link to reach an article in Financial Advisor that reported on an American Bar Association Business Law Section seminar on social media hosted in DC in November.
Katy Gordon, senior counsel for the SEC's Investment Management Division, told an audience that firms will be held responsible for misleading or inaccurate posts and responses to them that linger on their accounts or pages. Her division will decide how quickly they should come down before penalties are assessed. They will be "reasonable," she said; no one is expecting a post to be removed within a few minutes but if something that's deceptive stays up for a couple of weeks-well, the firm should know better.
The message from the SEC appears to be that if you make timely corrections to your content wherever it appears-in hardcopy marketing materials, on banners, and on social media-and you'll be fine. The trick is determining what is "timely" since the SEC's definition is a bit vague.
My advice is that someone should be monitoring all the social posts your firm and its members put out because you need to be monitoring the comments people leave. Remember, you're the expert. Posts can be taken out of context and people can leave responses that are incorrect. For example, I saw a tweet sending people to a blog post written about the tax-deferred 529 education savings accounts. A Follower retweets it with the comment that "all contributions are tax-deductible."
Is this comment accurate? Are contributions to 529 education savings plans tax deductible in every state? Your blog posts references the fact that this is the case in only a handful of states! Now, you have to reply to the comment with this information. Better yet, list the states that permit this and you're adding value by continuing the conversation without discrediting the Follower who was also trying to add value to the discussion.
The important message here is that you can't correct the mis-statement if you aren't monitoring your Twitter feed. And if you aren't monitoring your Twitter feed, who knows where the string of comments might end? If you make an error, just fix it as soon as you realize your mistake. If someone else makes a mistake, correct it as soon as you see it. Gordon pointed out that most social media sites allow users to edit or delete their posts and delete or hide the comments of others. So do tools like Hootsuite. In fact, I can't think of a site that won't allow edits and deletions to existing posts.
Social Media Regulation is "A Moving Target"
Gordon said the SEC is actually spending a lot of time answering questions about endorsements on social media. It hasn't made a comprehensive statement about this, she explained; social media regulation is still "a moving target" for the SEC.
Gordon did clarify that an endorsement independent of a financial advisor's professional role is fine. You can get an endorsement for your volunteer work or knowledge of fine wine. The problem, she says, is when statements are made and advisors "cross the line." What is that line? Unfortunately, it sounds like the SEC is still trying to determine how best to articulate this particular standard.
Financial Planning has a slideshow providing us with some things financial advisors should know about social media compliance that include some of the points I made above and a few others:
- Avoid making specific investment recommendations on social media
- Be aware of record keeping requirements for business communications and social media posts
- Static content like your LinkedIn profile needs to be approved in advance
- Don't encourage Facebook or LinkedIn "likes" for now until the SEC is clearer about their acceptability
So, what's the bottom line, the definitive answer? I'm pretty sure no one really knows just yet. In the meantime, remember this, you must participate on social networks in order to compete. That being said, use some common sense. Comply with the regulations we are aware of. Think before you tweet. Monitor your presence. Using social media regularly and consistently, in accordance with the rules and regulations, will help you build your clientele and generate revenue.