Social media is not the future; social media is right now. It’s not new anymore, it’s now a standard part of every sales and marketing strategy in every industry. Its primary purpose is to build brand awareness, foster engagement, and ultimately uncover and convert potential sales opportunities. It’s the perfect platform to connect with prospects, reinforce value to clients, and build credibility as a forward-looking investment expert.

Social media is now one of the leading forms of communication. It’s how we connect with one another and it’s how we research the companies we are considering doing business with. No longer is a company’s website enough to gain credibility; people want to see what industry thought leaders have to say and how much they know. Now, businesses are translating this knowledge through social media.

The financial services industry has been notoriously late to adopt social media, historically citing compliance regulations as the major roadblock. News flash – compliance has caught up with the social revolution and now FINRA has established easy-to-understand, guidelines which are basically the same rules for communicating with the public – this isn’t rocket science. Essentially they want you to:

  • Capture and retain all social media activity records of communication (Books and Records)
  • Have someone to supervise the people posting and review all business-related content they want to post (Supervision)
  • Keep an eye on what other people/companies post on the company social media platforms (Third-Party Posts)
  • Make sure you’re not posting any links to fake news (Linking to Third-Party Websites)
  • Stay away from recommendations, but if you do, make sure you get approval (Suitability)
  • Just like one of the major news sources aspires to, keep the posts “Fair and Balanced” (Fair and Balance Communications)

Luckily, technology has caught up as well, making it easier now more than ever for firms to meet FINRA’s requirements with sophisticated middleware and surveillance software. Yet asset and wealth managers still don’t seem to be making the adoption of new technologies a priority.

In PwC’s 2017 key findings in the Asset and Wealth Management industry report, Barry Benjamin, Partner and Global Asset & Wealth Management Leader for PWC said this about the findings: “Technology is a disruptive force… This industry is not thinking as agilely around technology and disruption as it should. How do customers interact with these firms and how will they want to in the future? When we think of demographic changes with huge wealth transfer where people do not work the same way as their parents – do we even have the right model to address their needs? Some CEOs are looking into this but our survey shows too many of them are not. There’s a real risk of firms being swept aside.”

Peregrine Communications performed a study of the digital presence and content marketing for 100 asset management firms across the U.K., U.S. and Europe, ranging from small boutiques to the largest in the industry. The results were not what you might expect. In the executive summary Peregrine states “We found that having a broad digital presence wasn’t only the domain of younger, ‘cooler’ asset managers: brands with a centuries-old heritage are just as capable of integrated digital marketing. Successful firms spanned a broad range of assets under management (AUM) and operational history.” This is quite interesting as another reason I often hear from firms as to why they are not on social media is that they are ‘too small’ and don’t have enough time or the budget to support a social strategy.

Peregrine’s study showed 57% of the companies surveyed were on Facebook, 80% on Twitter, 80% on YouTube and 94% on LinkedIn.

Of the companies on those respective platforms, 26% of the companies favored Twitter, 24% LinkedIn and 14% YouTube. Only 3% favored Facebook.

Could it be that the firms that aren’t adopting social media are afraid of it? What could possibly be at the root of that fear? Are they concerned about potentially sounding lame and not being ‘cool,’ tarnishing the brand they are trying to build? Conversely, if they’re trying to project a staid and conservative brand, do they run the risk of undermining that by trying to be tragically hip? Or is there a deeper issue with respect to a culture clash between compliance and marketing? Is the pace of social media too fast for the deliberate, methodical and analytical culture of compliance?

I spoke to Gidget Furness, Chief Compliance Officer for Moss Adams, Wealth Management, to get her thoughts on what she sees as the potential hold up.

If you’d asked me this question a year and half ago, I would’ve said that the reason is due in large part to the lack of understanding the concept and familiarity of social media, and how we apply it to our work. But now we have gained better knowledge and experience with social media, and we understand it’s an integral part of our marketing strategy and it’s what our customers want. I think having a social media presence is a no-brainer. Now I find our biggest challenge tends to be how we keep up with the requirements from the regulators at the pace of our marketing department.”

Whether it’s the compliance approval processes or capturing after the fact, many firms are still not as fast as their marketing teams would like them to be when it comes to churning out approvals in a timely fashion. The marketing/compliance culture clash can become a smoldering civil war inside your organization in a way that avoids your detection.

I asked Yulia Kalk, Chief Operating Officer; Director, Broker-Dealer Services for Gordian Compliance Solutions, what she has seen in the field.

 “Having been a former CCO I can tell you marketing review was the most hated thing on the agenda. It’s often a fight between compliance, sales and marketing, and its high volume with short deadlines – it’s a lot of work. I personally used to push it to the end of the day and when I could, push it off on someone else so it could be their turn to hate it. It’s just not fun for compliance to do when we have all the other requirements… Even with the latest archiving technologies, it still takes a lot of time to go through the manual marketing review process. Marketing review is by far the most time consuming and the most hated.

While social media is finally catching on with financial services marketing departments, the concept and a viable compliance approval process is still a big struggle. But you must find a way since this is now the way of the digital landscape. For Millennials, social media is the “norm” and the generation prior, hasn’t known life without the iPhone.

The solution may be to spend time understanding the cultural issues within compliance as well as the compliance workflow. Can you imagine, back in the 1920’s, refusing to adopt that newfangled contraption called the telephone? The reality is, you’ve got to figure it out. All the good intentions in the world will go for naught if you don’t spend some quality time understanding and overcoming the cultural and workflow issues.