As social media becomes part of the fabric of business development in almost every industry, noise around adoption for financial services companies is reaching a fever pitch. Consumer and professional services constituencies alike expect open-ended dialogue -- the call for transparency is deafening, and an increasing number of clients are skeptical of silence.

On the other hand, the SEC and Finra are knee deep in efforts to strengthen regulations around the use of social media. The oversight committees are not shy in reminding the industry that the U.S. is in a period of heightened regulatory supervision. Admittedly, not the best moment to swan dive into a new, open engagement with the world at large.

Rock, meet hard place...hard place, meet rock. 

Advisors have a right to feel trapped, and they should only embark on social media initiatives with complete awareness of the risks and restrictions. The full scope of online engagement is not appropriate, but select tools can be used in combination with traditional marketing practices to provide a calculated boost to new business and branding efforts.

Some measure of social media will be essential to a long term marketing strategy, because it is most certainly here to stay. The next generation of business leaders will be more comfortable texting than they are sending email, and 73% of today's teenagers use social networking sites, according to a 2010 study by the Pew Research Center1. That trend is not likely to subside as they mature into business leaders.

Most advisors may lag behind teenagers in this realm, but they do have an understanding of the business case for social media. 86% of financial professionals have a business or personal social media profile in 2011, according to American Century Investments' 2011 Financial Professionals Social Media Adoption Study. This is a significant increase over 2010 results, and is in keeping with the leap in frequent social media activity revealed by the survey; in 2011, over 50% of respondents indicated they use social media at least several times per week for business purposes.

In that light, the renewed regulatory effort from the SEC and Finra could not have come at a worse time. Advisors must continue to approach social media with cautious optimism and a flexible mindset in order to benefit from the tools without exposing their operations to unnecessary risk down the line.

Firm leaders should focus on four pillars of communications strategy to build greater visibility of their expertise:

Know The Tools

There are a range of tools that curry favor with the social media set, but not all of them are fit for the advisor audience. The common refrain has been to build a network with LinkedIn, and there is good reason for its popularity: it is safe, manageable, and provides a platform to engage with known and like-minded professionals. LinkedIn Groups offer online communities of peers, referral sources, and even prospects, while status updates keep members top of mind.

LinkedIn is also a "gateway" tool; once advisors understand and use it to its full potential, Twitter suddenly seems less daunting and dangerous. Twitter will reach a much broader audience, but without losing the sense of community among account owners and their followers. Those who choose to become a follower already have interest in an advisor's perspective, therefore tweets are distributed to a membership that is likely to understand and appreciate the dialogue that takes place.

Know The Rules

This is the tricky part. In social media, the rules lag significantly behind the tools themselves, so firms should be anticipating where trouble may lie down the road--not modeling online behavior to fall within current regulations.

Consider that when Finra first put together its Social Networking Task Force in 2009, Twitter was a far different animal than it is today. It was initially a tool for celebrities and pop culturists to gauge their popularity; today it is a legitimate source of intelligence and dialogue inspired by the man in the street, global news organizations, and professionals in all walks of life. It has made and broken careers for some (mostly when used in poor taste) and has been a productive thought leadership channel for others.

Guidelines are still being crafted to corral activity that is out of bounds, but it is no easy task to marry a traditional view of compliance with decidedly non-traditional tools designed for external engagement. The old guard still holds firm on standard red flags, for example any securities recommendations trigger NASD 2310, and broker-dealers must retain records of their social media communications.

These are understandable applications of old regulations to new methods, but the approach is not sustainable given the open nature and fast pace of social media. Rigorous compliance means significant delays, which in the end creates a dialogue that is neither open nor timely.

The guidelines will be modernized in the near term. According to its website, FINRA's Task Force set out to "discuss how firms and their registered representatives could use social media sites for legitimate business purposes in a manner that ensures investor protection." The results could manifest as minor alterations, or they could bring changes as burdensome as requiring employees' personal social media accounts to conform to stringent regulations.

With this in mind, advisors are best served by being proactive without being overly aggressive. Social media can stay within compliance guidelines if the tools are used to pass on thematic expertise and engage with connections about new ideas on a broad scope. LinkedIn and Twitter should be a teaser for expertise; wise advisors will save the heavy stuff for a more intimate and compliant setting.

Know Your Audience

When marketing financial and professional services, there are two types of communications: the loud kind and the smart kind. Shouting from the rooftops and gorilla marketing tactics are essential to consumer businesses that have wide target ranges and gain more revenue from short term bursts of high visibility. But for advisors that build their firms on trust, a steady, subtle stream of expertise is what wins and keeps clients.

Social media provides a powerful channel through which to extend that credibility, especially among the up and coming set of clients. Boomers may prefer a handshake and a phone call, but the next generation of high net worth clients has been raised on technology. Venture capitalists are, for example, a growing segment of the social media population; on LinkedIn and Twitter, there are deals to be sourced, intelligence to be gathered, and personalities with which to engage. The Washington Post noted on its Post I.T. blog the launch of AmplifierNetwork, a social networking site designed to "connect entrepreneurs, companies, universities and venture capitalists."2

The value of social media is not lost on the incoming wave of new wealth, and understanding this line of communication will provide an essential advantage to forward thinking advisors.

Know Thyself

Perhaps most importantly for all communications efforts, advisors should develop trust with their audience by first understanding their own values and character. They should recognize that while most firms offer similar services, none have similar stories. By emphasizing their unique perspective and the areas of expertise in which they have the most confidence, they can take strategic steps to set themselves apart in what continues to be a crowded industry.

Once the story is articulated, bringing it to audiences requires discipline and foresight--just like sound investing. There are a number of viable channels that will yield a return on an investment of time, and social media is only one area of impact. Contrary to sensationalist belief, traditional media lives on. Advertising lives on. A successful communications program closely considers the story, the message, the audience, and the combination of media channels that will be most effective given a firm's specific strengths and goals.

Regardless of which channels are pursued and how much social media activity is right for each firm, the message is the most critical element. The best story and most relevant expertise will inspire conversation, recognition, and eventually new business 

The SEC and FINRA are still in the throes of shaping an updated regulatory environment. New policies may be cumbersome, and advisors would be wise to leverage social media channels but keep close tabs on their initiatives. American Century's survey indicated that 53% of respondents have a social media policy in place - that number should be significantly higher. Putting in-house guidelines on paper will help create a climate of greater confidence and flexibility to adapt in the face of new regulations.

The path and pace of social media has made it crystal clear that such adaptability is key. Because one thing is certain: by the time these thoughts are printed, something will have changed in the world of social media. On the bright side, it's likely still safe to tweet about it...

Evan Zall is president of the Ebben Zall Group, a marketing and public relations firm.