Compliance fears limiting social media use

08-Feb-2017

By Sarah Kendell

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Fear of getting on the wrong side of the corporate regulator was proving a barrier to many advisers using social media to market their business, according to financial services software firm Midwinter.

New research conducted by the group in conjunction with business and marketing consultancy Jenesis Consulting found 87 per cent of financial advisers believed there was a degree of reputational risk involved in participating in social media.

The survey of 153 advisers also found just under half of respondents had chosen not to engage in social media because of the associated risk to their business reputation.

Midwinter senior brand manager Naomi Christopher said increasing compliance pressures were driving advisers to opt out of creating an online presence because they were unsure of what they were allowed to do and say in a public forum.

“Some advisers are concerned about crossing the line when it comes to what ASIC may see as breaching advertising or promotion guidelines when they are marketing their services online,” Christopher said.

“Advisers may perceive it as difficult to increase their branding whilst at the same time trying not to breach [regulatory guidelines] or give what may be considered personal financial advice online, particularly when writing online blogs or email marketing – many advisers have suffered reputation damage from being pursued by ASIC, so perhaps that is a concern.”

The research also revealed just under 13 per cent of advisers thought their licensees were providing adequate education around digital and social media, highlighting serious knowledge gaps among financial planners when it came to how to engage with clients online, according to Jenesis Consulting managing director Jenny Pearse.

“[Adviser education needs] change from case to case depending on the amount of exposure and use of social media by the individual – typically it is understanding the right platforms to use to suit their clients and potential clients, and what level of activity they should be maintaining on the relevant social media platforms,” Pearse said.

“Creating content is often seen as a roadblock and it’s important to educate advisers on how to build or source content that suits who they are and what will resonate with the people they want to talk to.”

With 47 per cent of advisers spending just one hour a week on online marketing, according to the survey, it was vital licensees invested in social media education to ensure advisers were able to connect with the next generation of clients, Christopher added.

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