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YOUR PRACTICE-How to use LinkedIn without riling regulators

By Deborah L. Cohen

CHICAGO, Nov 19 - San Diego-based financial adviser Leonard Wright has found a way to boost his exposure on LinkedIn without running afoul of regulators.

To stay within industry compliance boundaries, Wright, a certified public accountant, promotes his role as a cohost of "Financial Fridays," a Las Vegas radio program that helps people increase their financial literacy. His LinkedIn profile avoids direct mention of his 17-year practice.

U.S. regulators restrict investment advisers from certain types of promotion including using testimonials and endorsements, which are among the features available on LinkedIn.

"Issues completely unrelated to your practice have the most traction," says Wright, whose LinkedIn activity offers connections to rebroadcasts of the show, news stories of interest to financial-oriented readers and other useful information.

Wright says building credibility as a financial expert goes a long way toward boosting his name recognition, something that ultimately filters back to his primary role as a financial adviser. And data from at least one broker-dealer firm shows that active participation on the LinkedIn site can have a positive effect on a practice.

"Increased awareness, even when you're not promoting your business, is a very powerful tool," Wright says.

To be sure, many financial advisers wrestle with how to take advantage of LinkedIn - considered the most useful social media platform for professionals focused on business - without making regulatory missteps.

Most broker-dealer firms take a conservative approach, vetting material deployed by advisers in their networks through the use of third-party software that filters content for review and shuts off certain LinkedIn functions. While independent registered investment advisers (RIAs) may have a bit more latitude, they must still follow the rules.


Even without celebrity credentials like Wright's to fall back on, regulatory restrictions should not deter advisers from trying to carve out a legally acceptable presence on LinkedIn, says April Rudin, a Fort Lee, New Jersey-based consultant who specializes in digital strategies for the wealth-management industry.

Using LinkedIn can dramatically boost your street cred with targeted audiences, she says.

Use a professional photo and develop a profile that highlights information people can relate to on a personal level along with your work history, including volunteer work, hobbies and alumni associations, advises Rudin. Join discussion groups offered by LinkedIn where you can participate, even if updates are vetted for compliance purposes.

"Stay away from legal (groups), stay away from accounting," Rudin cautions, noting that participation in those areas will accomplish little other than placing an adviser's name in front of audiences filled with competitors.

Instead, if your practice targets entrepreneurs, join groups designed to help startup ventures. If your focus is executives in the energy sector, become active in groups affiliated with clean energy such as wind or solar industries. And commit to updating and sharing information on a regular basis - at least a few times a week.

Do the efforts pay off? While LinkedIn will not replace face-to-face interaction, Morgan Stanley, for one, has seen evidence that commitment to using the social media site frequently can help a financial adviser's practice.

In a recent poll, some 80 percent of about 4,500 Morgan Stanley advisers participating in the broker-dealer's sponsored LinkedIn program said regular use helped them identify new prospects, says Lauren Boyman, who heads digital strategy for Morgan Stanley.

Seventy percent said LinkedIn positively impacted their relationships with clients. And 29 percent said they converted at least one lead to new business.

"For advisers I think the bar is pretty low," Boyman says, noting that using basic features can make a difference. "They don't need to be doing anything mind-boggling."


Paying attention to the right details can make a big difference in a virtual space where users go to conduct business, experts say. In addition to key words, include descriptions of the types of clients and particular industries served, as well as articles and related material you may have authored, says Wayne Breitbarth, a consultant who advises professionals on how to use LinkedIn, and author of "The Power Formula for LinkedIn Success."

Among the most powerful features available to financial advisers using LinkedIn's free basic service is its advanced search capability, a tool that lets users identify contacts within specific industries, geographies and other finely honed parameters, making the old practice of purchasing leads ancient history.

One of Breitbarth's clients, a financial adviser specializing in the agricultural industry, used the search feature to target large family-owned dairy and grain farms; another was able to find top executives within the pharmaceutical industry.

What advisers do with potential leads varies. Sometimes these leads are connected to people already in an adviser's LinkedIn network, and he or she is able to ask an existing connection to make an introduction over the platform or on the phone. Or names can be targeted for marketing in other ways, including special events.

Evan Levine, a financial adviser in the New York City area whose firm is an RIA, has joined LinkedIn groups targeting chief financial officers and other decision-makers involved in pension administration, one of his focus areas.

Levine recently shared with his connections and targeted groups a blog he wrote about the role of fiduciaries. He is also experimenting with a free trial of a paid LinkedIn membership that affords him the ability to connect directly with individuals who are not affiliated with people in his network.

"The more you're active with (LinkedIn), the more you're exposed," he says.