Stephen Gazard, managing director of Sesame Bankhall Group, describes social media as a free, instant mode of communication that enables you to broaden your prospect base. It can help advisers network with peers, exchange ideas and position themselves as a “thought leader”.
But Mr Gazard warns of downsides to the immediacy of a medium that also permanent: once you post something online you cannot retract it. Compliance restrictions may also prevent you from interacting in the way you would socially as messages may be misconstrued.
“An online presence may backfire during difficult times. Anyone can contact you and openly criticise you in a public forum which, again, is hard to delete or block. You may be communicating with users who aren’t your target audience.
“Controls need to be put in place to ensure only approved users can communicate via your social media accounts. Tight processes are needed should that employee resign or have a grievance against your firm as they may misuse the communication tool.”
Also while social media does not in theory have any direct costs, Mr Gazard points out you must factor in time spent using the tool.
Countering the argument regarding negative commentary, Derek Bradley, chief executive of Panacea Adviser, reminds that individuals can say something negative about you or your business online whether you are engaged with social media or not.
“This can happen regardless of whether you engage with social media or not and so it is best to be engaged and then you can try to rectify the problem.
In term of cons, Mr Bradley agrees that social media marketing can place a high demand on your time.
“When embarking on social media there can be a delay in return on investment as it takes a while to build up a following and start engagement.
“It is rare that someone will start using your services solely off the back of a tweet, however it does help raise your profile, create awareness of what you do and drive traffic to your website. Therefore you must be willing to be in it for the long haul.”
Due to limited characters, Helen Turner, distribution and development director of Tenet, warns one major downside is that it is not always possible to display the necessary risk warnings in order to meet regulatory requirements.
This con can be avoided by staying away from financial promotion on social media or, if in doubt, if you are part of a network or national firm sending the message to the compliance team for approval.
If your time is more valuable spent elsewhere, Tenet’s Ms Turner said it may be worth investing in an external company to get your profiles set up for you.
“Once your profiles are set up you will also need to consider who will take charge of them? If your knowledge of social media is a bit shaky it may be worth thinking about social media training or even outsourcing completely.”