Report on Investment Adviser’s Use of Social Media in Massachusetts
There is a growing trend in the financial services industry to use social media sites for outreach to existing as well as potential customers. Noticing this trend, the Securities Division of The Office of the Secretary of the Commonwealth surveyed investment advisers registered and doing business within the Commonwealth of Massachusetts. The purpose of the survey is to determine the scope of investment advisers’ use of social media, and what, if any, record retention and supervisory procedures have been implemented or utilized by those advisers. Empirical evidence is good to have.
The Division forwarded the social media survey to 576 investment advisers registered with the Division and located in the Commonwealth and 79% of advisers have responded.
44% of investment advisers used some form of social media
Of those not using, 10% expect to use it in the next year
A majority of investment advisers using social media fall within the 42-62 age bracket
The Survey also suggests that some advisers do not have policies relating to the retention or supervision of social media content, are not retaining social media content, and do not supervise the use of social media content.
69% of advisers using social media claimed to not have written record retention policies related to the retention of social media content
57% also did not retain all content posted on social media websites maintained (directly or indirectly), by the firm.
It should not come as surprise that the Division concluded that additional regulatory guidance concerning the use of social media would be appropriate. We have already seen enforcement at the national level for the abuse of social media. I expect the states will be on board soon and including a review of social media as part of their examination and review process.