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Are the Risks of Using Social Media Worth the Benefits?
The risk of not using social media is greater.
– Melissa Callison, Charles Schwab's vice president of compliance communications
Some time ago I had a conversation with a twenty-something young man about a job offer he'd received from an investment advisory firm. The company wasn't active on social media at the time and had some misgivings about embracing a quickly evolving communications technology within a regulated – some might say hidebound – industry. Still, they understood the world was changing.
The sense that the future was upon them only grew during their conversation with the young man. “I wanted to know if I could use LinkedIn and other social media. This was essential to my success on the job, and if I couldn't use social media, then I wasn't going to take the job,” he recalled.
The idea that a talented job prospect would pass up a career with then- company over its resistance to social media led the managers to rethink their views.
In the end, the firm changed course – permitting not only their new hire to use social media, but also other professionals there as well.
SOCIAL MEDIA'S SHIFTING WINDS IN FINANCIAL ADVISORY
The tensions that the use of social media is producing in the financial industry are palpable. The vast majority of financial professionals still feel that social media is a quagmire of potential risks: costs, technology, compliance, reputation, and perhaps even the loss of their own jobs.
And yet if you're an investment advisor or other professional, you're probably already using social media in some manner – to communicate with friends, family, and colleagues or simply to maintain your professional profile. You're not alone: Even lawyers helping clients in the regulatory, brokerage, and financial advisory world are actively using this media. They're embracing social media for the same reasons you're reading this book: to learn how to build their brand, develop new relationships, and simply be current.
Are the risks of using social media worth the benefits? Another way to ask this question is whether an advisor or other professional can not or should not use social media.
In this day and age, most investment advisors are sensing the growing necessity of using social media. The issue really is how to go about it and how to ensure compliance with regulatory requirements. One solution is to hire talented people, the next generation of financial industry employees who are savvier than most with technology and social media.
But a firm has to open the door to social media first before it can bring others on board. Toward that end, it helps to evaluate what the real challenges are in using social media and the ways of coming to terms with them.
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