Social media warriors
Financial Planning
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Social media and financial advisors can be uneasy bedfellows. With Instagram, Facebook, TikTok and LinkedIn playing an increasingly larger role in Americans’ everyday lives, it seems it would only make sense for an advisor to use those platforms as a marketing tool to attract and retain clients, especially younger ones who have never known a world without the internet. One-third of American adults reported in 2021 that they trusted social media to help guide their financial decisions.
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But the potential for foot faults and outright abuses lurks. The latter are a concern of the Securities and Exchange Commission, which last December charged eight individuals in a $100 million securities fraud scheme involving the use of Twitter and Discord to manipulate publicly traded stocks. Still, the former may be a greater danger.
Wall Street brokerages need to be hyper-vigilant about legal, compliance and regulatory risks and requirements as they offer content-creator capabilities to their advisors. The latest to the game: Raymond James, which is rolling out Instagram, Spotify and Youtube functions for its advisors. It will be interesting to see how many advisors in the independent broker-dealer’s ranks of roughly 8,700 jump on the social media train.
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