Douglas Boneparth, a CFP in New York, says he is increasingly contacted by brands and other professionals for his opinion, to endorse products or for his content. "I'm starting to make a market out of being an influencer so these types of platforms and technologies could be very useful in helping me continue to build my brand,” Boneparth told Financial Advisor.
However, aspiring advisor influencers like Boneparth and Lee must adhere to not only social media compliance, but also the advertising rules of the Investment Advisers Act of 1940, which prohibits advisors from engaging in advertisements that refer, directly or indirectly, to any testimonial concerning the advisor or his or her advice, analysis, reports or other services.
“To the extent a financial advisor is posting information regarding their firm's investment advisory business to the public, it’s likely to be deemed an advertisement of the firm subject to the advertising rule,” said Zach Furnald, an attorney in the regulatory division of MarketCounsel, a financial services compliance consultant in New Jersey.
FaceTime on the iPhone is viewed by 1Degree as an untapped frontier for advisors interested in peddling themselves as influencers and thought leaders.
After downloading the 1Degree app onto an iPhone, financial advisors register and create a profile and are given a link to promote on their social media sites.
Advisors are then on a list of influencers who can receive money offers from the general public for two-minute consultations on FaceTime video. Once an offer comes in, the advisor then accepts or rejects each bid.
“You can’t do much in two minutes except an initial consultation, so this is a good way to grab back that market share of charging an initial consultation fee that major companies like Fidelity, Schwab and Vanguard have cut into,” Lee said.
Upon acceptance of a money offer, the advisor then receives payment directly to their Paypal account. But for an advisor, it cannot be money deposited into a personal account. “It must be received in the name of the advisory firm,” Furnald said.
Bids range from $1 to $500, enabling an advisor to earn up to $500 a session. The app, however, takes 20 percent of every transaction and Apple pockets 30 percent, leaving enterprising financial advisors with only 50 percent of any money offer accepted. However, revenue earned by an advisor using the app would need to be transparent.
“It would be a matter of disclosing the fact that the initial consultation fee varies, describing the consulting services the advisor is providing, what the service entails and whether the fee being charged is fixed, negotiated or based on the platform,” said Furnald.