Almost half of financial advisers use social media in a professional capacity, while a fifth consider social media use important for their business, research from the Association of Professional Financial Advisers has revealed.
The survey, conducted by NMG Consulting with 225 financial advisers, found that of the 46 per cent of advisers who use social media professionally, 48 per cent use it as a tool for keeping up with general industry news, 40 per cent use it to communicate with existing clients and 36 per cent use it to target new clients.
Chris Hannant, director general of Apfa, said that while the proportion of advisers not using social media still outnumbers those that do, the relatively high numbers using it as a channel for targeting new clients and speaking to existing customers does suggest it has a role to play.
“It is important that social media use is client driven – for example, if there is a demand from clients to receive information from their adviser through channels like LinkedIn or Twitter – rather than forced upon clients who may not want it.”
The poll also showed that while a third of advisers have no concerns over using social media, a further third are unsure or concerned about Financial Conduct Authority rules around social media use.
Separately, 37 per cent of advisers said they were not aware of the regulations around financial services and social media.
Last August the regulator published a guidance consultation on social media use, stating that financial promotions must be “media-neutral to ensure that consumers are presented with certain minimum information, in a fair and balanced way, at the outset of firms’ interaction with them”.
The FCA said it does not want to prevent firms from using social media, as it understands this can be a powerful communication channel and therefore of “significant value to firms”, but warned that any forms of communication can be viewed as a “financial promotion” and therefore communications must be compliant.
In the same month, specialist regulatory consultancy Bovill revealed a 61 per cent increase in the number of financial promotions that were withdrawn or amended by the FCA in the 12 months to the end of June, adding that many firms are still grappling with the implementation of new guidance in areas such as promoting financial products on social media.
Mr Hannant added: “With so many financial advisers still unsure or unaware of the rules and regulations around social media use, further clarity is needed from the FCA.
“The recent consultation on the issue was a good first step and should help advisers become more comfortable using social media, providing the resulting guidance is clear.”
To learn more about this subject, and earn CPD, read FTAdviser’s Guide to Social Media.