Market Overview

6 Social Media Tips For Investment Firms


This article was written by Sara W. and is the opinion of the author.

Within the last decade, social media has changed the way people communicate and interact on a daily basis. People of all ages and backgrounds flock to popular social media networks for business, personal, social and informational purposes. While it has become a global phenomenon, the investment management sector has been slow to adopt social media strategies.

Social media is commonly used to build and strengthen branding, reinforce a company's reputation and foster customer relationships. Businesses, and even governments, are establishing a social media presence to communicate directly and freely with customers and potential prospects.

In 2013, PricewaterhouseCoopers found that 40% of investment managers "are not active on social media and remain on a ‘wait-and-see' approach." While the SEC and FINRA have released guidance on social media use, many investment firms still view it as a risk in the current regulatory environment. Remaining compliant within an open and unrestricted forum is a challenge; however, even the most hesitant firm can't deny that it's here to stay.

To leverage social media in a fully compliant manner, firms should consider the following tips for a thoughtful approach to social activity:

Platform Selection

Each social media platform has different functionality. Investment firms should understand the functionality and settings of each platform they use to effectively meet regulatory requirements.


According to FINRA, social media guidance rules are interpreted "in a flexible manner to allow firms to communicate with clients and investors using this new technology." With this context in mind, setting up clear policies and procedures is critical, but firms should not be paralyzed over any ‘ambush' rulings coming from regulators.

A successful social media strategy advocates commonsense and flexibility.

Content Calendar

Firms should create a calendar of future content to help achieve regulatory compliance and limit reputational risk. Content should be timely and relevant, pertain to events and happenings and meet pre-approval measures.

To reduce or alleviate compliance concerns, firms can reuse their existing content or create templates with pre-approved messaging.

Voice of the Consumer

The interactive nature of social media creates some unique situations for investment firms. Tapping into the voice of the consumer can play a significant and beneficial role for any investment firm today.

Firms should leverage social media platforms as the means to identify who your customers are, what they want and what type of product or service they need, to best meet those needs going forward.


Training is a critical component of a firm's social media strategy. In addition to regulatory statutes, firms also have corporate guidelines by which they must abide. Training should provide a clear idea of expectations when acting on behalf of the firm and include all necessary personnel and external business partners involved, including consultants, public relations firms, etc.


Archiving is necessary to the nature of compliance. Social media creates a new platform from which to capture, store and retrieve messaging and hyperlinked materials to third-party sites. Many e-mail archiving solutions have built-in technology for social media, while advanced technology tools are designed to meet the unique challenges of varying social media platforms. Investment managers should consider these tips to leverage a thoughtful approach to social media in a compliant manner.

Social media engagement can help investment firms build a loyal base with authentic, real-time dialogue, information sharing and thought leadership positioning. In the US and Canada, it is estimated that 5 million high-net-worth ("HNW") investors actively use social media to research financial decisions.

Overall, consumers are doing more than simply paying bills online. Consumers are leveraging the internet to research, compare, collaborate, connect, share experiences and fundamentally connect with businesses in a new way.

Given the commonsense approach by regulators, the barriers between investment firms and social media use are quickly fading. Investment first should develop a sustainable social media strategy to harness the power and reap the benefits of this platform.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: investment firm social media strategy social media tipsCrowdsourcing General


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