March 25, 2013 / 8:09 PM / 6 years ago

Canadian advisers see gains, pitfalls in social media

TORONTO (Reuters) - 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 company-wide.

“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 documents.

“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,” Britton said.

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 actual process.”

Reporting By Andrea Hopkins; Editing by Peter Galloway

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