A growing number of investment advisors, money coaches and other financial experts are turning to social media including Twitter to help engage with clients or try to solicit business from new customers. Kacper Pempel / Reuters
A growing number of investment advisors, money coaches and other financial experts are turning to social media including Twitter to help engage with clients or try to solicit business from new customeShow more

Allure of Twitter grows for business investors



Convincing an investor to increase the amount of money they hold in a financial institution is not always an easy task for money managers. But, as it turns out, sometimes all you need is Twitter.

When one bank client, for instance, wrote that he had sold his business to Salesforce, a large tech company that offers cloud computing services and software, Faheem Gill followed up on the update from Twitter by trying to get a larger share of the customer’s wallet.

“I saw a tweet about the sale, had my relationship manager reach out to him and subsequently was able to bring [around] US$10 million into the bank which was sitting in another account of his,” recalls Mr Gill, who has since left the bank in California and is now in charge of running the global social media practice for social media practice for Xelleration, a consultancy firm with an office in Dubai.

Both in the UAE and other countries around the world, a growing number of investment advisors, money coaches and other financial experts say they are turning to social media sites to help engage with clients or try to solicit business from new customers.

In the United States, three quarters of financial advisors say they have used at least one social network for business, according to a survey released last month by Putnam Investments, a financial management firm. Among these individuals, LinkedIn was dubbed the most popular, followed by Google+ and Facebook then Twitter.

The growing appetite for online videos within the UAE has meant some advisors have turned to YouTube to provide financial education and updates about their services. Through the site’s channel KillikFinanceVideos, an advisory firm with a branch in Dubai called Killik & Co has recently released videos that include market updates and a question-and-answer segment with an asset manager.

“Sometimes using video is easier for clients or prospective clients to understand the complex nature of some of the financial aspects being talked about by the press,” says Sarah Lord, a chartered financial planner who splits her time between London and Dubai and is the director of wealth planning at Killik & Co.

“Some people prefer watching and listening to something, rather than reading,” she adds.

Last year, Google released a survey showing the YouTube users within the Emirates accessed the video-sharing site more frequently than anywhere else in the Middle East and North Africa (Mena).

Yet just because viewing, posting and sharing videos is popular here, it does not mean that it is easy to create content that will pass the muster of local regulators.

In the Dubai International Financial Centre, where Killik & Co is based, Ms Lord says she and her colleagues are careful not to release a video segment, or tweet for that matter, that might be construed as “financial promotion.” This can be especially hard to do, local financial experts say, when the laws that govern advisory services in the UAE do not clearly specify policies that outline the use of social media.

Local stock exchanges, including the Dubai Financial Market, Nasdaq Dubai and Abu Dhabi Securities Exchange, did not respond to requests seeking guidance about the use of social media tools for sharing information among stock brokers, financial advisors or publicly listed companies.

Overall, compared with other some other countries, the use of social media within the financial services sectors in the UAE still lags behind the West.

“It’s still not used as much as in the US or UK because there’s a lack of clarity,” says Ms Lord.

Regulators in certain countries have outlined rules for how social media can, and cannot, be used within the financial services sector. Some of the changes followed high-profile cases after famous singers, investors or corporate executives came under fire for updating certain information on social media sites.

Last year, the chief executive of the video-streaming and rental service Netflix posted a comment on Facebook that coincided with the biggest gain for his company’s stock in more than a month. He noted that viewing on Netflix had surpassed 1 billion hours of viewing for the first time, which coincided with a rise in the share price of more than $10, to $81.72, that particular day.

While the US Securities and Exchange Commission had said it was considering bringing charges against the executive, it recently concluded that social media was fine – within certain limits. Specifically, the agency said companies could use channels such as Facebook and Twitter to announce key information “so long as investors have been alerted about which social media will be used to disseminate such information.”

Many have taken heed of the new regulations and tried to be extra cautious to avoid regulatory difficulties.

Before coming to Dubai, Mr Gill, 37, says he avoided any possible conflicts under US financial regulations by refraining from tweeting any specific news about investment returns or interest rates.

Hilary Martin, a financial advisor based in California, also avoids discussing returns and offering specific buy or sell trade recommendations.

“In other words,” she says, “when it comes to tweeting out your opinions, stick to the investor behavior rather than investment selection.”

Some advise leaving space in social media messages for brief notes that reference government or company regulations.

“If you are giving advice over social media and it is the type of information that requires a disclaimer then you need to make sure such disclaimers can be provided by your chosen social media platform,” says Scott Rawitscher, the co-owner of Collaborative Business Solutions, a firm based in Oregon.

Yet not everyone seems to be as worried about the digital backlash. In August, the billionaire businessman and investor Carl Icahn tweeted, “We currently have a large position in Apple. We believe the company to be extremely undervalued.

Shares of Apple noticeably spiked afterwards.

In a follow-up tweet, Mr Icahn then added he had “discussed my opinion that a larger buyback should be done now. We plan to speak again shortly”.

And that coming from a man who has only sent out 46 tweets, follows nine individuals but has more than 109,000 followers.

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