A growing number of registered investment advisors flirt with social media as a client communication tool, but less than half of firms using social media retain all their social media content or even have a record retention policy.

The federal government and its agencies have yet to take a solid position on social media use by investment professionals. But despite the fact that the SEC and FINRA have not enunciated rules or regulations specifically targeting social media use by RIA and brokerage firms, general advertising, solicitation and communication rules undoubtedly apply to new media—FINRA issued guidance last year saying as much.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of social media in Advisor’s Journal, see Getting Your Feet Wet in the Social Media Market (CC 11-79), Advisors’ Stairsteps of Influence (CC 11-49) & SEC Says “Not So Fast” to Advisor Social Media Marketing (CC-11-40).

How fast time flies. The one year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) came and went on July 21^st, and we’re left wondering: Where are we now?

Surprisingly little has changed since the Act was passed on July 21, 2010. The Securities and Exchange Commission (SEC) and other federal agencies charged with implementing Dodd-Frank have struggled to comply with their mandate. The SEC, in particular, has had difficulty meeting its timeline due to funding problems and short staffing.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of Dodd-Frank in Advisor’s Journal, see Dodd-Frank: Dying on the Vine? (CC 11-116), Is Barney Frank’s Resolve to Implement Dodd-Frank Weakening? (CC 11-95), & Republicans Look to Erode Dodd-Frank (CC 11-75).

As expected, the SEC has delayed implementation of the RIA “switch.” On June 22, the SEC approved rules that will transition thousands of advisors from SEC to state regulation, but the new rules won’t be effective until June 28, 2012, almost a year later than initially expected.

Under the regulatory structure in place prior to the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, investment advisors with $25 million or more in assets under management (AUM) were regulated by the SEC, and those with less than $25 million in AUM were regulated by the states. Dodd-Frank changed the registration threshold so that advisors with between $25 and $100 million in AUM—so-called “midsize advisors”—will be required to withdraw their registration from the SEC and register with state regulators.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the planned switch and in Advisor’s Journal, see Disarray at the SEC is Complicating the “Switch” (CC 11-83), Hedge Funds Must Now Register with the SEC under the New Wall Street Reform Act (CC 10-45) & Dodd-Frank Wall Street Reform and Consumer Protection Act (CC 10-35).

You’ve been on a few “dates,” and you talk on the phone every couple weeks, but how well do your prospects and existing clients know you and understand your core personal investing philosophy? Small talk breaks down barriers and common interests keep the conversation moving, but taking the advisor-client relationship to the next level takes some work—and a lot of research. A recent survey gives us a head start by elucidating the communication divide that holds many advisors back from taking the big plunge with their prospects.

The survey found that HNW clients favor electronic communication media more than their advisors. Twice as many millionaires than advisors would like to use technology-enabled media—smart phone applications and social media. While 85% of millionaires are willing to communicate through social-media, e-mail, and text messages, only 43% of brokers and financial advisors share that willingness. And your millionaire clients are also more likely to use LinkedIn than you are (28% to 16%). And a third of millionaires already use social media in general as part of their professional life.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For other client development discussions in Advisor’s Journal, see Advisors’ Stairsteps of Influence (CC 11-49), Getting Your Feet Wet in the Social Media Market (CC 11-79) & Are Portfolios-To-Go Threatening Your Business? (CC 11-77).

We’re all aware that annuities get a bad rap in the media: High fees, high-pressure sales, and unsuitability are the predominating themes.

A recent Securities Litigation & Consulting Group white paper captures the sentiments of the anti-annuity press, commenting that, “[a]nnuities stand out as the investment most likely to be unsuitable since in virtually every instance, the investor would have been better served by mutual fund or a portfolio of individual stocks.”

Annuities are neither inherently “good” nor “bad.” It follows that rational evaluation of annuities can’t be conducted in a bubble—it must focus on their application.  Herein lays their value and the coup de grâce the industry and individual producers have been awaiting.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of annuities in Advisor’s Journal, see How Much to Allocate to Annuities: A Critical Analysis (CC 11-109).

For in-depth analysis of the income taxation of annuities, see Advisor’s Main Library: Section 19.2 Income Taxation of Annuities.

The Financial Industry Regulatory Authority (“FINRA”) has issued a regulatory notice addressing price volatility concerns associated with low-priced equity securities in customer margin and firm proprietary accounts. The notice advises that close attention be paid to low-priced equity securities; price volatility is usually associated with low-priced equities because they are inherently volatile. But what does FINRA consider a “low-price equity,” and what does it mean for you and your clients?

FINRA advises firms to weigh the risks that come with low-priced equity securities before extending credit in strategy-based or portfolio margin accounts. FINRA cautions firms to consider “volatility and concentrated positions in a single customer account and across all customer accounts, as well as the daily volume and market capitalization of each security when imposing ‘house’ maintenance margin requirements.”

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of FINRA-issued guidance in Advisor’s Journal, see Getting Your Feet Wet in the Social Media Market (CC 11-79) & SEC Says “Not So Fast” to Advisor Social Media Marketing (CC 11-40).

When advisors hear the term “social media marketing,” the usual list of suspects comes to mind: LinkedIn, Facebook, and Twitter. Could Advisor Pages, a new advisor search engine, be the next business boosting social media site like LinkedIn, or will its cost to advisors outweigh any marketing benefits?

The hype surrounding social media marketing has yet to die down, and advisors’ use of online marketing techniques continues to grow. Adding to the panoply of sites relevant to advisors, BrightScope recently launched Advisor Pages, a free online service that allows consumers to search for financial advisors. Advisor Pages compiles data from public sources, including the Financial Industry Regulatory Authority (“FINRA”) and the Securities and Exchange Commission (“SEC”). Search results can be tailored based upon advisors’ names, locations, amounts and types of assets under management (“AUM”), employers, formal complaints, legal disputes and more.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)

For previous coverage of social media in Advisor’s Journal, see Getting Your Feet Wet in the Social Media Market (CC 11-79) & It’s Not Facebook That’s Making Microsoft Obsolete: Advisor Technology Trends (CC 11-49).

If you’re considering transitioning your book of business to a new firm, maintaining the confidentiality of client information should be your overarching concern. Navigating a move without triggering a lawsuit can be challenging, but there’s a protocol that provides advisors with a best practices guide when moving between firms.

In 2004, three wirehouses – Citigroup Global Markets, Inc. (“Smith Barney”), Merrill Lynch, and USB Financial Services, Inc. – created the Protocol for Broker Recruiting (the “Protocol”). The Protocol’s primary purpose is to safeguard clients’ privacy and flexibility when choosing Registered Representatives (“RRs”) – especially RRs who are switching firms. By reducing litigation over RRs transitioning to new firms, the high costs associated with competitive recruiting efforts can be minimized and client information can remain protected.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)

For previous coverage of broker-dealer issues in Advisor’s Journal, see  Is a Hybrid Practice Model Right for You? (CC 11-46), What’s Driving the Increasing Appeal of the RIA Model? (CC 11-69).

Why is this Topic Important to Wealth Managers? Our discussion relates to motivations of clients given the current economic state of affairs. The blogticle presents results from a recent survey relating to current challenges facing wealth managers, as well as what is influencing the way clients are perceiving their retirement and what must be done about it.

Senior Market Advisor, published by Summit Business Media, recently announced the results of its Advisor Survey in the March 2011 issue.

The second annual Advisor Survey published by Senior Market Advisor asked subscribers, licensed insurance and financial advisors serving the wealth planning market, to provide their thoughts on their practice and the state of the industry. Questions included issues that keep them up at night, what marketing strategies are working, and not working in the current economic climate, how new technology has changed the way they do business, whether or not advisors’ relationships with their longtime clients and prospects have changed, as well as the fears their clients are facing.

“We had a fantastic response to our second annual Advisor Survey, with more than 800 advisors participating,” said Senior Market Advisor Editor Daniel Williams. “We received valuable data from advisors and obtained great insights on their challenges, how they are adapting to a changing marketplace, and how they’re finding success with new lead generation techniques.”

Highlights of the Advisor Survey include:

• The #1 thing keeping advisors up at night is Lead Generation, taking the attention away from the economy in last year’s study.
• 59% said that community involvement was their most effective strategy to gain new clients in the current economic climate.
• 49% of advisors say that new technology has increased productivity, while 32% believe it has taken away the personal touch.

Wealth managers were asked: “Where are you having your biggest success right now?”

The survey answers to this question indicated participants specify annuities as still their bread and butter, but nearly a quarter say life insurance is just as important a part of their sales. Other products with particularly high take rates include Med Sups, Medigap and even standard health insurance; group benefits packages; reverse mortgages; funeral trusts; and final expense planning. However, only 7% of respondents say that they are having current success with long-term care insurance.

One interesting question presented to wealth managers by the survey was: “When you are talking to your senior clients, do you feel their relationship or attitude with you has changed over the past couple years?”

The Responses:

• 46% say yes, it has gotten better
• 42% say it hasn’t changed at all
• 18% say yes, it has gotten worse

The survey also indicates that approximately 53% of respondents have a website or a blog. The results presented advice to wealth mangers with regards to social media and electronic marketing; Rick Brooks and Kristen Luke said respectively:

“Develop a detailed social media plan with specific goals you want to achieve with your website content as well as the number of followers and potential clients you want to access through your Facebook, LinkedIn and Twitter pages.”

“Review the content you post online to make sure it remains accurate. Remember—rules and regulations change. Be ready to change with them.”

Perhaps the most interesting perspective the survey presented was aimed at identifying client fears. Wealth managers were asked: “When you talk to your clients, what are the biggest fears they’re dealing with?” They responded:

Outliving their money…65%

State of the economy …67%

Having to work longer than planned…44%

The Government…51%

Health Care…62%

Results were featured in the March issue of Senior Market Advisor, and the complete survey results are available online at SeniorMarketAdvisor.com.

Tomorrow blogticle will continue to address issues surrounding the private wealth management practice including the step transaction doctrine.

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

Excited about offering the latest private placement to your clients? Be careful. FINRA and the SEC are actively examining private placements and the firms that sell them. And if the regulators believe that something is amiss, they won’t hesitate to impose severe fines on everyone involved in the sale. As part of its ongoing sweep of firms that sold interests in failed private placements, FINRA has issued sanctions against two firms and seven individual principals of those firms. FINRA accuses them of causing significant investor losses by failing to conduct a reasonable investigation before offering the private placements for sale to investors.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)

For previous coverage of private placements in Advisor’s Journal, see Firms Selling Private Placements Face Increased Scrutiny (CC 11-32) & Tax-Free Hedge Fund Investment: Private Placement Insurance (CC 11-39).

For in-depth analysis of the use of variable products as investment vehicles, see Advisor’s Main Library: E—Limitations on Variable Products as Investment Vehicles—Private Placement Insurance and the “Look-Through” Rule.