Midwinter : Reputational risk still a determining factor for advisers when it comes to Social Media
It appears that the Australian advice industry is split when it comes to whether reputational risk prevents them from participating on social media channels, according to research carried out by Midwinter Financial Services in conjunction with Jenesis Consulting.
In 2016, Midwinter surveyed 153 advisers of varying backgrounds and specialisations on Digital and social media, with the results revealing mixed feelings on many aspects in regards to how the industry engages with these tools. The responses were compiled and put together in Midwinter’s Digital and Social Media Survey Report.
Of particular interest was that 87.3% of planners surveyed believed there to be some degree of reputational risk involved in engaging on social media. However, even with the majority of advisers surveyed agreeing that risk exists, 53.5% stated that the fear of reputational risk has not prevented them from engaging in social media, revealing divided opinion within the advice industry.
Senior Brand Manager of Midwinter – Naomi Christopher says these results are understandable as “Both in the past and present, advisers have expressed fear of engaging in social media due to the potential of tarnishing their reputation. This anxiety can quite easily be rationalised when selected examples of adviser social media faux-paus have been dragged through the industry and main stream media. However, we believe for the most part that this risk has been overstated at times. If advisers keep their posts and interactions professional, nonderogatory and avoid being highly controversial, they shouldn’t live in constant fear of damaging their professional reputation.
“Reputational risk factors within advisory practices can be mitigated by practice owners having a strategy in place whereby for example, there is an appointed person responsible for social and reputation activities within the organisation. Additionally, advice practices can employ a social media policy where employees adhere to company guidelines when engaging on digital and social media platforms.”
The survey revealed that when it came to having a social media policy in place, there was a direct correlation between this and adviser understanding of RG234 (ASIC’s guidelines for promoting financial and advice services), with 72% of those who were aware of RG234 indicating they had a social media policy.
Especially in the case of licensees, awareness of RG234 appeared to be a key driver of the probability of the licensee having a social media policy in place, meaning that those who are educated in ASIC’s guidelines in relation to digital marketing are more likely to set guidelines for their advisers when it comes to social media.
Interestingly though, only 12.8% of those surveyed believed their licensees were providing adequate education when it came to digital and social media. Non-aligned advisers seem to have held this view most strongly, with only 7.3% of those surveyed satisfied with the amount of education they were receiving from their Licensee on these topics.
Jenny Pearse, Managing Director of Jenesis consulting stated that “risk exists in everything we do but it is how you mitigate the risk that is critical to your success; along with an understanding of who you are and why you do what you do. 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. In the past, I’ve had some concern about the lack of knowledge around the importance of a good social media policy, however the survey results indicate that the correlation between advisers having a social media policy in place and being aware of RG234 was prevalent, with 72% of those who were aware of RG234 indicating they had a social media policy. 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.”
Positively, advisers appear to be embracing digital transformation within their industry with 66.4% of those surveyed stating they were excited about the prospect and only 4.7% expressing concern. When this statistic was broken down into ‘type of adviser’ the least worried segment appear to be bank/institutional planners. Miss Christopher stated this lack of concern “could possibly be attributed to their confidence in the institution they are employed by to be across the digital market.”