SIFMA’s Social Media & Digital Marketing Seminar made its first in-person return since 2020. What was abundantly clear between 2020 and 2023 was how drastically the world has changed in the span of just three years.
In 2020, the seminar focused primarily on marketing and sales engagement and the use of newer technologies like LinkedIn, Twitter, Facebook and YouTube. Data shared during that event indicated advisers actively using social media were more successful than those who didn’t.
Fast forward to 2023, the key conversations were:
- How firms are operating in completely new ways — with greater reliance on digital communication tools and creating brand new information risks
- The rocky economic and financial market environment, which has driven firms back toward well established and more predictable business practices
- How Securities and Exchange Commission (SEC), Financial Conduct Authority (FCA) and Commodity Futures Trading Commission (CTFC) actions were focused on the use of communication tools, including off-channel technologies as well as the newly updated Marketing Rule for investment advisers
Are financial advisers’ social media practices changing?
Putnam Investments previewed their upcoming adviser social media practices survey results at the seminar. They highlighted that:
- 79% of advisers now indicate that LinkedIn is their preferred network
- 46% of respondents indicated that LinkedIn is the only network allowed by their firm (up 16% since 2019)
- 38% of advisers use LinkedIn exclusively
- Facebook, Twitter, Instagram and YouTube usage are all down by about 30% since 2021
- 52% of advisers believe that social media will not have a significant role in marketing due to company compliance policies
So, yes, practices are evolving. Advisory firms are playing it safe in response to regulatory enforcement and the updated Marketing Rule.
Regulators are likely to add to the pressure this year as noted in the Financial Industry Regulatory Authority (FINRA) Exam Priorities letter that noted a likely sweep involving the use of finfluencers, gamification, and other engagement practices. As noted at the seminar by FINRA’s Head of Advertising Regulation Amy Sochard, firms continue to struggle with recordkeeping and supervision of today’s social content.
The ongoing off-channel communications challenge
Other panelists and attendees echoed that last remark, looking for additional guidance to address deficiencies related to off-channel communications risk.
This is where the topic becomes more than just the adviser’s use of social media. It’s about broader compliance and governance practices for any approved communications tool, along with the inspection and monitoring that firms undertake to uncover the potential use of prohibited tools. As we have previously written, this is a firm-wide challenge that spans social media, mobile apps and collaborative tools – and across all levels of the firm.
This challenge, starting with the initial decision of choosing to permit or prohibit a specific communications tool, is the subject of our upcoming panel discussion at the SIFMA C&L Conference on March 13 in San Diego. We’ll report live from the event and will share how firms are adjusting supervisory processes to ensure that they are staying in step with developments in communications technology and the ongoing focus from regulators.
Author: Robert Cruz – Vice President, Information Governance at Smarsh.
Robert is Vice President, Information Governance for Smarsh. He has more than 20 years of experience in providing thought leadership on emerging topics including cloud computing, information governance, and discovery cost and risk reduction.
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