How Financial Advisors Use Social Media

Social media is an excellent tool for presenting expertise, which is something that’s valued in a financial advisor. Therefore, financial advisors are trying to understand how social media can lead to more leads without trying to conflict with FINRA, the Financial Investors Regulatory Authority. Below, we’ll take a look at how investors present what they know while still abiding to FINRA’s guidelines.

Social media gives financial analysts the opportunity to speak about current stocks and improvements within a company or the improvement of ones personal investments. They are also able to share how investments started and the approaches that helped that investment gain success.

Analysts are using different tactics to show off their knowledge for others to view such as Blogging, Facebook, Twitter, YouTube and niche social networks that are designed for investment analysts.

  • For blogs, investors post up articles about current investments in stocks and recent news and events of financial advisors.
  • Facebook gives the opportunity for analysts to create a profile to show off what they have accomplished.
  • On Twitter, investors could link in links to tweets that can take followers directly to recent blogs and articles.
  • Videos of investments are posted on YouTube.

Those are the well-known tactics, however a whole sub section of social media sites have launched that allow investors to connect directly to analysts (and vice versa).

  • Seeking Alpha is a social network that handpicks articles from top market blogs, money managers, financial experts and investment newsletters. Investors or interested investors are able set up an account on Seeking Alpha to follow on recent articles by analysts who show off their personal approach to stock picking and portfolio management.  It also gives the opportunity for Seeking Alpha members to track stocks they follow and exchange investment ideas. Designed for investors, Seeking Alpha offers a collection of ‘potential leads’ for the investment industry.
  • Similar to Seeking Alpha, Covestor is a social network that lets investors create and share portfolios. Interested investors that may need help with their personal stock and trade could follow successful strategies from analysts.
  • Stock Twits is compatible to Twitter, whereas Stock Twits main focus is on investments. Stock Twits is also generated to professional investors sharing ideas that can be helpful to those who show interest in starting an investment.

Even though analysts are subjected to using social media to help gain new customers, some proceed with cautious guidelines to try not to go against any social media regulations towards investors.  For example, Putnam Investments decided to take upon the use of social media to expand its company but doing so was a risk to try not to conflict with FINRA.

As such, the CEO of Putnam, Robert Reynold’s has this warning on his Twitter page.

FINRA has recently updated their regulations to take into account social media, and new media. That said, as you can see from the Putnam example, many large companies are weighing into social media carefully.

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