Sales Intelligence AI for sales insights and conversation intelligence AI-powered

Investor solicitations via social media: The new rules and best practices

RingCentral for Financial Services


Facebook Twitter Linkedin Copy link post URL copied
3 min read

Client testimonials have long been a great way to attract new business. However, for regulated industries such as investment advisory, that has not been the case. Until the beginning of 2021, financial advisors couldn’t use testimonials in their online client communications.

The SEC released a rule that investment advisors can now post reviews as well as enable clients to share testimonials on their websites. As with any rule, there are a number of caveats:

  • Testimonials must be fair and balanced
  • Clients must give consent for their review to be shared
  • Information must be up-to-date and accurate

How the SEC’s rule changes client communications

Over the years, financial advisors have utilized social media in client communications at a greater and greater rate. An April 2019 survey revealed that 83% of financial advisors use social media for business purposes. Advisors who use social media increased the amount of assets under management significantly, seeing an increase of $15.3 million in AUM between 2018 and 2019.

With the change in the SEC rules, financial advisors can now use client testimonials in client communications posted on social media. Moreover, it is now easier to use social media to solicit client testimonials.

In the following sections, we’ll explore some best practices advisors can use for client solicitation and development via social media to reap the benefits of this new advertising avenue while complying with SEC requirements.

1. Make it easy to communicate via social media

Investors have become far more comfortable with the idea of communicating with their advisors through social media. A July 2020 survey showed that 44% of Gen Zers and 66% of Millennials feel comfortable with reading advisor communications on Facebook, while 36% of Gen Zers and 34% of Millennials find it perfectly acceptable to read client communications on Twitter.

Moreover, investors have adapted to new ways of communicating with their advisors in the wake of the global health crisis. The same survey revealed that 62% of investors would either partially or entirely maintain new methods of communication (such as social media) going forward.

As an advisor, you can maximize the impact of client communications on social media by choosing a communications platform that enables investors to easily reach you through social media chat and submit testimonials if they wish to do so. For your investors, it should be as easy as opening a chat, typing in their thoughts, and clicking “send.”

2. Choose the right social media platform for your investors

It’s true that there are a number of social media platforms your investors might use, but not all platforms are likely to produce the same results when it comes to client solicitation. The Putnam study revealed that the social media platform of choice for acquiring new business is still LinkedIn, with 85% of advisors engaging with clients on that platform. Sixty-two percent use Facebook, 52% use Twitter, 41% use YouTube, 38% use Instagram, and 22% use Snapchat.

A look at the demographics of your investors will likely help you determine which social media platforms to include in your solicitation strategies.

3. Use LinkedIn tools appropriately

Simply using LinkedIn does not guarantee successful client acquisition. The Putnam study further surfaced some commonalities among the advisors who were successful in acquiring new clients and gaining new assets. For example, 50% of advisors used LinkedIn’s direct messaging feature to connect with new prospects, and 92% of those gained assets by doing so. In addition, 48% of advisors who initiated new relationships used LinkedIn’s InMail feature to reach out to out-of-network prospects. An additional 36% either hosted or participated in a LinkedIn Live session as well. Finally, a staggering 80% of advisors who initiated new relationships used one of LinkedIn’s premium memberships.

RingCentral for financial services

4. Connect with clients through a secure, compliant, unified communications platform

Three-quarters of financial advisors rely on direct messaging for client communications.

Through a unified communications platform, advisors can send client communications through social media channels. The benefits are many. Clients gain the benefit of convenience and speed, which creates a better client experience. Advisors gain even more benefits from a unified communications platform:

  • Quickly confirm document receipt or appointment scheduling on the fly
  • Integration with CRM systems and client logs that capture all client communications across all channels automatically
  • Real-time file-sharing capabilities
  • Send message alerts quickly across clients
  • Keep business and personal texts separate
  • End-to-end encryption
  • Ability to track and retain all solicitations and recommendation conversations

A best-in-class unified communications platform should also be SOC-certified, ISO-certified, GDPR-compliant, and PPI-compliant.

RingCentral can help advisors with solicitation and client development

RingCentral’s unified communications platform makes it easy for advisors to take advantage of social media for client communication and parts of the client onboarding process. To learn more about our secure, flexible platform, get a demo today.

Originally published Mar 16, 2021, updated Dec 30, 2022

Build trusted relationships from anywhere with text messaging, video conferencing, and phone calls—all in a single easy-to-use app.

Up next

Financial services

Compliant cloud communications for investment advisories: is it really possible?

As investment advisories make their inexorable move to cloud-based communications platforms and applications as part of a larger digital transformation initiative, is it really possible for investment advisories to maintain communications compliance when leveraging cloud technology? Why investment advisories are embracing cloud communications today Though the financial services industry, as a whole, has been somewhat ...


Facebook Twitter Linkedin Copy link post URL copied

Related content