In a sign of the times, 600 advisors at an Investment Management Consultants Association conference recently crammed into a training session called “Get Linked In, Not Left Out: Compliance Friendly Ways to Harness Social Media’s Power in Your Practice.” That’s no typo: 600.
As presenter Kip Gregory, a social media expert, puts it: “It points to the level of interest people have — and the desire for clarity and background. It encapsulates the single issue that most advisors are centering on: How do I use this in a way that (A) is relevant to my business and (B) doesn’t get me in trouble?”
Over the past months, firms such as Guardian Life, Securities America, American Portfolios and, notably, Morgan Stanley Smith Barney, have joined early adopters in embracing social media sites such as LinkedIn, Facebook and Twitter. But there has been a little hiccup.
As Stephanie Sammons, CEO of Dallas-based Wired Advisor, observes: “The majority of the financial advisor population out there are scratching their heads wondering: Is it going to be worth my time? They’re not really ready to jump in yet. They are still very much trying to understand the value of all this.”
The good news for the advisor: Regulatory compliance, a chief concern, should become clearer when FINRA expands upon its social media guidance later this year. Also, firms such as Socialware, Erado, Arkovi and Actiance are rolling out new and improved technology solutions to help advisors stay compliant as they tweet, blog and connect.
Socialware, which has client relationships with more than 100 FINRA-regulated firms, raised the bar recently when it launched a software product that drives business leads to advisors. And, importantly, forward-thinking financial services firms are providing vetted marketing content that advisors can use as profile material or status updates as they build their online presence.
“People inherently know in their gut this is big. Like the Internet, like email, this will forever change the way advisors do business,” notes Socialware CEO Chad Bockius. “But it’s not enough to simply deploy some technology. From the business side, you really do need education. And anyone who is doing this without a business strategy is missing the mark.”
If it all seems a bit overwhelming, it is.
But as Gregory, who heads the The Gregory Group in Washington, D.C., likes to remind advisors: “It’s really not about social networking. It’s about what this technology can do for you as a business-building tool to create a systematic approach to marketing, selling and relationship management. It’s putting together a cohesive strategy where you can, as an individual, create a guerrilla marketing and selling capability — and it doesn’t cost you a fortune. You could never have done 10 years ago what you can do today for free. And this isn’t a Chia Pet. It’s here to stay.”
What do experts in the social media space describe as top of mind as advisors navigate this new terrain? Here is what they’re thinking:
Develop a social media strategy. What do you want social media to do: Generate referrals? Drive traffic to your website? Build your brand among existing clients? “The questions I’m getting now remind me of questions I was getting 15 years ago around the Web. Should we have a website? Yes, everyone should be online. What’s your website’s strategy? You need a social media strategy that spells out what you’re trying to do,” states Lee Kowarski, a principal with kasina, the consulting firm. “That strategy will determine which mediums to use and how.”
A social media strategy or policy should also cover how you behave online. Additionally, he says, it’s important to be mindful of the distinctive mix of content and tone at the various social media sites. Advisors may use Facebook, for example, to communicate a softer side such as their community involvement. Meanwhile, they can use Twitter to disseminate news and a blog to offer in-depth analysis. “What’s your mix and balance?” Kowarski asks. “That’s going to determine what kind of conversations you get started.”