The Socially Savvy Advisor + Website: Compliant Social Media for the Financial Industry

Chapter 4Are the Risks of Using Social Media Worth the Benefits?

The risk of not using social media is greater.

—Melissa Callison, Charles Schwab's vice president of compliance communications

Some time ago I had a conversation with a twenty-something young man about a job offer he'd received from an investment advisory firm. The company wasn't active on social media at the time and had some misgivings about embracing a quickly evolving communications technology within a regulated—some might say hidebound—industry. Still, they understood the world was changing.

The sense that the future was upon them only grew during their conversation with the young man. “I wanted to know if I could use LinkedIn and other social media. This was essential to my success on the job, and if I couldn't use social media, then I wasn't going to take the job,” he recalled.

The idea that a talented job prospect would pass up a career with their company over its resistance to social media led the managers to rethink their views.

In the end, the firm changed course—permitting not only their new hire to use social media, but also other professionals there as well.

Social Media'S Shifting Winds in Financial Advisory

The tensions that the use of social media is producing in the financial industry are palpable. The vast majority of financial professionals still feel that social media is a quagmire of potential risks: costs, technology, compliance, reputation, and perhaps even the loss of their own jobs. ...