How Social Media Helped One RIA Significantly Grow Its Business

Heron Financial Group expanded its online presence to market and grow business with compliance help from archiving platform Smarsh

Four years ago Heron Financial Group barely had a social media presence, operating just a LinkedIn profile.

Today the New York-based registered investment advisor firm can be found on LinkedIn, Facebook, Twitter and YouTube. Adding an expansive social media presence to its marketing program has seen the firm significant growth from where it was two years ago.

“Everybody wants to know what is the ROE on social media … and the answer is it’s impossible to tell, other than looking at the overall revenue numbers,” said David Edwards, founder and president of Heron Financial. “Before we did this kind of stuff, we were growing in the single digits and now we’re growing in the 40% range.”

Part of its social media expanse included expanding its existing relationship with Smarsh Archiving Platform, who was already archiving Heron Financial’s emails. Through this platform, all content is captured, preserved and readily available for search, review and production in the platform, making Heron’s supervision procedures more efficient.

Smarsh recently released a case study showing how it has helped Heron Financial meet the Securities and Exchange Commission’s recordkeeping and supervision requirements so the advisory firm could effectively use social media for their marketing efforts.  

As Stephen Marsh, CEO of Smarsh, said in a statement, “Heron Financial demonstrates that financial services firms can use social media to help grow a business without adding a burden to the compliance department.”

Platforms like Smarsh allow firms, Marsh added, “to use social media the way it wants and on the devices it prefers, while meeting its recordkeeping and supervision requirements.”

As the chief compliance officer for Heron Financial, Edwards wanted a way to limit the time spent supervising its high volume of social media content to no more than an hour each week.

“When you’re an RIA, as we are, you’re obliged to keep track of everything that you publish,” he said. “In the good ol’ days, it was just a magazine insert [and] it was pretty easy. You just threw it in a folder. Now, we’re posting stuff daily and we’re sure as hell not going to print that off, you know?”

Smarsh archives all the social media content and provides a tool that makes all that data easily searchable.

“As part of our annual compliance review, we’ll take a handful of words – like guarantee, promise, performance, buy recommendation – and punch that into the archiving platform and see what comes up,” Edwards said, adding, “and the answer should be nothing because those are all forbidden things to do.”

Edwards considers his view on social media compliance to be a simplified view compared to others.

“A lot of other firms have now created 20-page compliance binders for social media,” he said. “We’ve got it boiled down to three bullet points.”

First, Edwards asks, “Would you want to see this on the front page of The Wall Street Journal? If no, don’t post.”

Second, Edwards says, “You cannot tout specific securities. You can’t put out a buy recommendation on a stock, you can’t put out a buy recommendation on a mutual fund. You can put out general information, such as we put out a bulletin recently saying we weren’t buying Alibaba for our clients in the context of this is a general description of the rules we use when we buy securities.”

And third, Edwards says, “You can’t post anything that looks like a testimonial.”

Edwards is quick to admit that social media isn’t the all-seeing answer to success. He also attributes the firm’s growth to other changes, including its adaptation from a solo firm four years ago to a multi-person practice.

“Social media will not make your firm grow rapidly,” he said. “Social media is the force multiplier of a really good marketing program. I tell people, if you don’t have a good marketing plan, having a good social media platform won’t help you.”

The firm currently serves 95 families with a total of $160 million assets under management. Edwards expects assets under management to grow to $250 million by year end 2015.


Check out SEC: Advisor Use of Social Media Testimonials Sometimes OK on ThinkAdvisor.

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