How Los Angeles RIAs are Using Social Media for Business

Author: Craig Pollack Date: Aug 24, 2015 Topics: _Investment Advisor Blogs

How Los Angeles RIAs are Using Social Media for BusinessThe past five years have transformed the way that Los Angeles investment advisors do business. If you are not marketing your goods and services on the company website, tweeting new product announcements or industry trends, or posting YouTube how-to’s, you are missing out on potential opportunities for using social media for business.

According to a study by Cogent Reports, 75 percent of RIAs and broker-dealers are using social media for business purposes. LinkedIn, Twitter, and YouTube are excellent mediums for attracting new clients, but they need to be used in accordance with FINRA rules as well as the firm’s social media policies.

What’s the Most Popular?

Not surprisingly, LinkedIn is the most popular social media outlet for financial advisors, with 74 percent of the survey respondents stating that they use it regularly. 65 percent said they employed Facebook as a platform and 32 percent claimed to use Twitter for professional purposes.

Managing the Risks

Because the financial services industry is highly regulated, registered representatives must be careful when it comes to posting content online. Sending a tweet that praises a particular stock, for example, could violate FINRA’s rule against making recommendations.

FINRA Rule 2010 also requires that any static content be approved by a broker-dealer’s firm before it is posted online. Failing to monitor an RIA’s social media posts can create serious consequences, such as heavy fines and sanctions.

Company Social Media Policies

Financial advisory firms need to document how they want employees using social media for business. Below is a list of important issues that require confirmation in writing.

  • Users permitted to post on the company’s behalf.
  • Social media channels that can be used. Some firms approve only LinkedIn while others allow Facebook, YouTube, and Twitter.
  • Content permitted to be posted online. Is only firm-related information approved, or will other articles be shared?
  • Reviewing content prior to posting. Anything that could be seen as financial advice must not be shared.

Many firms use their Facebook pages to post investment news, invitations to social events, and announcements about upcoming conferences and webinars. Investment recommendations and advice are strictly off-limits.

Establish an Archiving Platform

Like other electronic communications, social media activity must be archived. Major archiving platforms offering this service include Smarsh, Actiance, and Hearsay. It’s easy to connect your social media accounts and set up an ongoing data connection for archive purposes. Some of these providers will even distribute content and set up metrics to gauge content popularity.

Arrange for Ongoing Oversight of Social Media Platforms

Any firm using social media for business needs to identify the party or parties who will review content for adherence to company and industry rules and check the archiving connection for correct performance. Since FINRA and the Securities Exchange Commission prohibit client testimonials for RIAs, LinkedIn and Facebook should be checked for unsuitable “likes” or “recommendations”.

Bottom Line

When used in accordance with industry guidelines, social media can be an inexpensive and valuable marketing tool. Los Angeles RIAs who want to engage with users on Facebook, LinkedIn, and other platforms must become thoroughly familiar with FINRA’s communication guidelines and how they are applied to social media posts. Then the marketing can begin without fear of regulatory repercussions.


What ways does your investment advisor firm use social media for business? Let us know your thoughts in the Comments box below.


And to follow-through on the tips introduced in this short article, be sure to download your free guide, Investing in High Net Worth Clients: The LA Investment Advisor's Guide to Using Technology to Manage and Grow Your Firm.


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Craig Pollack

Craig Pollack

Craig is the Founder & CEO of FPA Technology Services, Inc. Craig provides the strategy and direction for FPA, ensuring its clients, business owners, and key decision makers leverage technology as efficiently and effectively as possible. With over 30 years of experience building the preeminent IT Service Provider in the Southern California area, Craig is one of the area’s leading authorities on how small to mid-sized businesses can best leverage and secure their technology to achieve their business objectives.