A lack of social media presence poses bigger risks for advisers than any of the threats associated with its use, according to Jay Vaananen, blogger for Banker’s Umbrella, speaking at the 68th CFA Annual Conference in Frankfurt.
The conference focuses on the idea of investing with a purpose and has attracted close to 1800 delegates from 70 countries in the past.
At a session on social media for finance professionals, Mr. Vaananen said technology including social media has fundamentally changed how we’re influenced, how we communicate buying behaviour and how we make buying decisions.
Being on social media has a lot of advantages for financial advisers and other finance professionals, Mr. Vaananen said. “You can collect information, monitor industry trends, competitors and build your own knowledge and base,” he said.
However, he outlined the risks involved and the list includes reputational risks, disgruntled clients and employees, Freudian slip, lack of clarity and getting hacked.
But the bigger risk is not being on social media, Mr. Vaananen said, quoting chartered financial planner Martin Bamford, “if you are not easy to find online, you’re not easy to refer.”
Mr. Vaananen said, as more and more professionals get on social media platforms, it also important for firms to build a clear social media policy and to use the right platforms.
The FCA recently published finalised guidance on how financial firms should be using social media to promote their services while maintaining compliance with financial promotion regulations.
“Every platform you use for social media should have analytical tools. It’s gold,” he said. Also extremely important is producing the right content. “One needs to be consistent, be seen and share interesting information,” Mr. Vaananen said. He described human engagement, consistency and sharing as the three main factors for a successful social media profile.
Finally, he said financial advisers should use social media to create awareness among the general public on the importance of financial planning and financial literacy.
Jay Vaananen can be followed at @bankersumbrella