Like it or not, advisors are going to need to focus on social media as a part of their marketing and sales efforts moving forward. Still, many are sitting on the side lines because of compliance concerns. Speakers at the Raymond James national conference helped ease those fears.

In a morning breakout session at the Raymond James national conference, Patrick Cuillo a compliance officer, and William Brill, a compliance supervisor, both working at Raymond James Financial Services, presented on the topic of social media compliance.

Cuillo started by asking, “Does anyone think the Web is going away?”  No hands went up.  Instead there were lots of laughs. His point was clear. Advisors need to focus on online communications.

Raymond James Social Media Usage
In a show of hands, less than half of the attendees in the breakout session had a business page for any of the following social networks: LinkedIn, Facebook, Twitter and YouTube (the approved options).

Statistics shared from Anthea Penrose, public relations manager at Raymond James, stated about 50 percent of all advisors are using social media at Raymond James. At RJA (the employee channel), of approximately 2,400 financial advisors, there is just over 60 percent penetration. At RJFS (the independent channel), with roughly 3,200 financial advisors, penetration is around 40 percent.

Of all advisors using social media through the Hearsay platform:
• 98 percent have a LinkedIn profile
• 26 percent have Facebook pages or profiles
• 21 percent have Twitter pages
• YouTube stats were unavailable, as videos go through the usual review process instead of Hearsay

Scott Curtis, president of Raymond James Financial Services, in a private meeting spoke on social media usage at Raymond James. He said, “There are certain advisors that are using it more than others. There are some that are very active. Some like it.  Some just aren’t as active.” He believes one determining factor is what type of clients the advisors are serving.

For usage, Brill stated, “[We have] almost 8,000 posts in the last 10 months from our advisors. It’s on the increase.”

“Ninety percent of the time what is being posted by advisors is not problematic,” added Brill

Compliance Monitoring And Archiving
It was clear that Raymond James is not interested in monitoring personal information.  For that reason they recommend advisors have separate personal and business profiles. Personal profiles can note individuals are an advisor at Raymond James, but they do not need to be submitted if financial-related information is not shared there.  The business profiles have to be resubmitted every year and are reviewed by the 15-person team that is growing in size.

Because Raymond James sees the value in social media, they have hired Hearsay Social for archiving. With the vendor expenses and staffing costs, all together Raymond James is paying millions of dollars, and is absorbing that sum so it does not come directly out of the advisors’ pockets.

To post, advisors have to go through the Hearsay social tool, a native site. If individuals go directly to Facebook through their browsers, it will not be captured.  Another drawback is that the Hearsay tool for mobile use has not yet been activated. 

Advisors can use Hearsay to mass distribute content through multiple channels.

Raymond James Compliance Advice
“When discussing social media with regulators, they are still trying to figure it out (too),” said Cuillo.

He pointed out some Finra rules and expectations. He referenced content standards under Finra Rule 2210(d)(1) and that advertising needs to be fair and balanced. For example, "Peace of mind" has been deemed to be misleading. Advisors need to hedge with language like, "No investment is guaranteed."

Finra also requires that the member name be disclosed. They will also look for suitability, so be careful promoting something like a double leveraged ETF to all social networks.

Cuillo gave examples of problematic images. “You can’t use a picture of money, but it might be ok if you are talking about the money supply.  It is not ok if you are talking about your asset allocation strategy,” said Cuillo.

Regarding photographs of clients, Cuillo advised, “If you are going to do close ups of your clients, we suggest you do a photo release. It is not a regulatory requirement, but you don’t want to get sued.”  The example of a wife seeing a photo of her husband with someone other than her was an example that got some laughs.He noted that it is a tight regulatory environment and there will be increased scrutiny.

In 2013 the Raymond James compliance team reviewed 30,000 ads and 160,000 pages, with an average turnaround time 1.1 days.

An Observation
The tweeting at the Raymond James national conference was low for its size. With 3,500 attendees, the hashtag #RJFSNCPD should have been more widely used. It hit me that if there is a limitation in leveraging social media use from smartphones, it is going to greatly diminish real-time communications. I did find it as proof of the importance of “mocial” (Marketing Lingo You Must Add To Your Vocabulary).

Mike Byrnes is a national speaker and owner of Byrnes Consulting LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.