Investment advisors in the Bay State aren't exactly social media savvy when it comes to communicating with their clients. So the state of Massachusetts is stepping in by issuing new guidelines and best practices standards in the next year.
A survey conducted by the Securities Division of the State Secretary of Massachusetts shows of the 44 percent of investment advisors in the state using social media platforms to communicate with their clients, only 30 percent have written record retention policies for social media content and only 4 in 10 retain all online content posted by the firm.
"Up until now, most states and other regulatory bodies have relied on FINRA's regulation (10-06) to provide guidelines to advisors and companies on proper use of social media in their marketing activities," says Stephen Selby, director of LIMRA Regulatory Services. "Now with more financial advisors using social media to communicate with their customers, we are seeing state regulators take a closer look at how and what they are communicating. We expect a number of states to follow Massachusetts' lead."
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LIMRA has been identifying the impact of social media on the life insurance and financial services industries, and provides ideas to companies on how to effectively use them.
"Recently, FINRA fined an advisor for using Twitter to communicate 'unbalanced' messages to clients―the tweets shared a very optimistic view of the economy or the equities markets without disclosing the potential hazards," Selby says.
"Despite the guidance, there is still much confusion on what can and cannot be said using social media. Companies can help avoid this problem by ensuring advisors selling their products have a clear understanding of its policies and of the rules set forth by regulators."
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