* Social media aid relationships, but compliance issues lurk
* Most embrace LinkedIn, Twitter too fast-moving for some
* Marketing and sales not suited to social media
By Andrea Hopkins
TORONTO, March 22 Canadian financial adviser
Will Britton is the quintessential success story of social media
in the industry. He's active on Facebook, LinkedIn and Twitter,
and when someone needs a financial planner, Britton's contacts
are quick to send a "here's my guy" link. Presto, a new client.
"I'm probably doing it wrong according to what social media
experts may say," said Britton, a certified financial planner in
Kingston, Ontario, and member of Advocis, the Financial Advisors
Association of Canada.
Britton, 38, spends 30 to 60 minutes a day on social media,
and it has helped him build a broad network of people who refer
clients, become clients, and share knowledge.
"I don't have separate accounts for personal and business,
they are one and the same. What I've found is I'm my personal
brand anyway as a financial planner, so instead of shunning that
and separating the two, I've embraced it."
In fact, that's exactly the strategy that Geoff Evans,
founder of the London, Ontario-based Social Media Coach,
believes works best.
While many financial advisers think social media is key to
marketing their services and products, the amount of red tape
involved in regulatory compliance makes it most valuable as a
tool for networking, referrals and gathering information, not
promotion or sales, Evans said.
"For an adviser, their first sale is not the product, the
first sale is getting people to buy into them - believing that
they have integrity and they are credible and trustworthy," said
Evans, who was a financial adviser before starting his social
media business three years ago.
"That is what social media can do. It can help build that
foundation of a relationship."
In fact, online marketing of investment products is almost
impossible if advisers comply with industry regulations, whether
set by the Mutual Fund Dealers Association or the Investment
Industry Regulatory Organization of Canada (IIROC).
And in an industry where advisers must wade through
regulatory red tape at every turn, adding another layer in order
to be active in social media may not seem worth it.
"The challenge initially was that all of these tweets need
to be approved by compliance, and Twitter is very time-sensitive
and usually an interactive type of medium, so I kind of shied
away initially," recalled Tina Tehranchian, a certified
financial planner at Assante Capital Management in Toronto.
Tehranchian has worked out a system in which a week or two
of less time-sensitive content is pre-approved by her compliance
department, and then tweeted incrementally the following week.
While she's pleased to get retweeted and see her Twitter
following grow, she's not yet convinced the format really works
in the cautious world of wealth management.
"I'm not sure about the return on investment, but I view it
more as a long-term project, and I don't want to write it off at
this point," said Tehranchian, 51.
Like many colleagues, Tehranchian's biggest social media
focus is on the professional LinkedIn network, which she uses
for building a community among colleagues and centers of
influence such as lawyers or accountants who may provide
referrals, as well as for educating and sharing links to media
or events she is involved in.
Social media expert Evans said most financial advisers at
least have a profile on LinkedIn. Some use Facebook, and "way
down the list" is Twitter.
Canada's biggest financial services firms are also looking
first to LinkedIn as they try to find a footing in social media
that is both nimble enough for the format but conservative
enough to prevent compliance problems with regulators.
Bank of Montreal, Canada's fourth-largest bank, has begun a
pilot project in social media at its Nesbitt Burns wealth
management unit. The first hurdle was building a system that
could track, monitor and archive all of the social media content
in accordance with IIROC rules.
Next, Nesbitt put some 30 advisers through an education
process and required they pass a test to ensure they knew the
social media protocol. Now, for eight weeks, they are testing to
see how much success the advisers find with LinkedIn to judge
whether it is worth rolling out a social media strategy
"There is excitement and eagerness ... there is also
caution, because you want to ensure you are doing this
prudently, that you want a well-thought-out strategy, but you
don't want to take too long to get into it," said Shane Mungal,
head of marketing at BMO Nesbitt Burns.
While compliance may seem onerous, Britton said he views
social media as little different from conversations he has in
real life. He's happy to give general financial information, but
as soon as it gets specific, he must make the discussion a
private one and get the necessary signatures on disclosure
"I need to make sure I don't type anything that someone is
going to act on, and have it backfire and result in a lawsuit on
me, same as if we were in a dressing room after a hockey game,"
Evans said what is most important for advisers when they
consider social media is to know what they want to get out of
it, and to recognize where it can help most. For example, it's a
great way to keep up-to-date on weddings, births and major
purchases by clients, information that can prompt an adviser to
schedule a meeting and adjust long-term financial planning.
After that, they have to use common sense, just as they do
face-to-face with clients.
"It is not really this new world," Evans said. "The exact
same rules that have always been in place for advisers still
apply in social media. The difference is that social media moves
a lot faster than putting together an ad for a newspaper. So it
is that speed that makes it more complicated, rather than the
(Reporting By Andrea Hopkins; Editing by Peter Galloway)
((Andrea.Hopkins@thomsonreuters.com)(416 941 8159)(Reuters
Keywords: CANADA WEALTH/SOCIALMEDIA
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