Dealers lacking in social media

The reasons for the lower ratings included firms imposing cumbersome vetting processes and not providing enough support to help make the best use of social media tools – as well as, in some cases, preventing advisors from using social media as they wish.

A common complaint was that compliance issues are behind most of the problems. For example, several advisors said their firms don’t understand how to manage compliance for social media, so the firms have chosen to avoid certain platforms. As a result, advisors are prevented from using the tools they want to use.

“We have been told, point-blank, that nothing business-related can be put on Facebook or Twitter,” says a Manulife advisor in New Brunswick, who adds that although he has permission to use LinkedIn, he’s disappointed at not having access to all platforms.

Another prevalent complaint was that firms are overly cautious or inefficient in managing compliance for social media, and the approval processes are too cumbersome or slow. Says a Portfolio Strategies advisor in Alberta: “We are allowed to use social media, but you have to get everything approved and it’s a long process.”

Despite these complaints, advisors acknowledged there has been some progress at some of these lower-rated firms. For instance, Desjardins advisors said that in the past, they were told to avoid social media; now, however, they see their firm embracing it. In fact, Shawn Smith, the firm’s vice president, distribution, for the Ontario and Atlantic regions, says Desjardins encourages the use of social media and provides “a whole team that works with advisors and managers on how to position themselves on LinkedIn, Facebook and Twitter.”

Similarly, IPG advisors said they are seeing some improvements. Most notably, the firm now has a client-friendly website, Yourplan.ca, that serves as a portal to advisors’ websites and provides links to advisors’ social media profiles.

In contrast, there are some firms that appear to have a better grip on social media. In particular, these firms are making the effort to provide more efficient management of compliance, which enables the firms to focus on assisting their advisors. These firms saw their ratings in the social media category hold steady.

For example, Toronto-based DundeeWealth Inc. has launched the Protegent social media monitoring system, provided by Wayne, Penn.-based SunGard Data Systems Inc., in order to streamline compliance. DundeeWealth also provides an in-house team of consultants who are well trained in Protegent, as well as on all the social media platforms, so they can help advisors set up their profiles and show them how best to use the platforms.

Similarly, Toronto-based Assante Wealth Management (Canada) Ltd. has a social media policy that includes a code of conduct and provides pre-approved content that advisors can post on their social media profiles.

“This is a quickly changing area,” says Steve Donald, Assante’s president and CEO. “But, certainly, we’ve embraced the use of [social media] to the extent that we can do it in a compliant manner.”

One reason why dealer firms may not be diving into social media, advisors said, is the lack of guidance from the Toronto-based Mutual Fund Dealers Association of Canada (MFDA). Says an advisor in Alberta with Portfolio Strategies: “The whole [channel] has been very behind on this because the MFDA is still figuring out its rules for social media.”

Developing social media guidelines is not high on the MFDA’s list of priorities, says Paige Ward, the MFDA’s general counsel and vice president, policy. But more specific rules are on the horizon, she adds: “It’s covered in the guidance on sales communications and advertising in Rule 2.7. Obviously that [rule] is fairly general, so we are looking at providing more specific guidance.”

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