Reputation risk hinders adviser social media use
Fear of reputation risk was inhibiting financial advisers and licensees from participating in social media, a survey showed.
Midwinter's Digital and Social Media Survey report revealed 87.3 per cent of advisers believed there was some degree of reputation risk involved in participating in social media.
When broken down, the survey of 153 advisers found 70 per cent of aligned advisers and 61 per cent of licensees/head offices believed there was reputational risk involved in social media.
Non-aligned advisers were split in their opinion, with 44 per cent believing there was limited reputational risk involved, while 42 per cent were convinced of reputational risk involved in social media.
The report, however, said an adviser's understanding of the Australian Securities and Investments Commission's (ASIC's) Regulatory Guide 234 on promoting financial products and advice services would increase chances of advisers adopting a social media policy.
The survey revealed 72 per cent of advisers who were aware of RG 234 had a social media policy in place, while only 35 per cent who lacked awareness had a social media policy.
Jenesis managing director, Jenny Pearse, said that while there was risk involved in any activity an adviser wished to undertake, what they did to alleviate that risk was crucial.
"The key areas that all advisers should consider when establishing a social media policy are: reputational risk, security and trust, as well as a good understanding of the implications of RG234," she said.
Noting the correlation between understanding RG 234 and adopting a social media policy, Pearse said "that's a great step forward in an ever growing area of engagement for advice professionals; we need to continue to improve that figure with the support of the Licensees and Associations".
Only 12.8 per cent of advisers believed their licensees provided sufficient education on digital and social media, with only 7.3 per cent of non-aligned advisers satisfied with their licensees for the level of education provided.
Advisers preferred Facebook as an avenue to engage with clients on social media (34.3 per cent), while LinkedIn stood second (28.3 per cent).
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
