Okay, I’ll admit it: It’s beginning to look like this social media thing isn’t going to go away (at least not any time soon). Yet it’s still not clear to me how nearly constant contact with clients—weekly, daily, 24/7—is going to fit into advisors’ practices and lives, nor how social media will actually improve service to clients or the performance of their portfolios.
To get a better handle on integrating social media into advisory practices, I recently caught up with industry veteran Jim Pierson, who is head of compliance and advisor support at Beacon Hill Financial in Columbus, Ohio. Jim is my kinda guy: he’s been working with advisors for more than 40 years, experience that’s taught him to take a no-nonsense, bottom-line approach to the business of advice. Particularly when it comes to slick new ideas that has everybody buzzing with excitement, and very little track record. Like social media.
“Everybody keeps telling me advisors need to do it,” Pierson told me. “But I’m not entirely happy with how advisors are getting into social media these days. I believe we need to take a step back, and think about exactly what we’re trying to do.” Jim suggests that advisors need to ignore the hype about social media—just as they would about any new investment product—and focus on their overall strategy for building their businesses. “What’s your strategic plan for marketing?” he asks. “How does social media fit into that?”
Pierson tells the advisors he works with to focus specifically on their long-term objectives: are they trying to bring in new clients? Increase their AUM? Build their brand as experts? Or simply strengthen their relationships with their existing clients and/or their community? “The key to successfully executing any strategic plan,” he says, “is to have objective, measurable goals.”
By “goals,” he means tangible changes to one’s business, not just techno data, such as the number of people who follow you on Twitter, or people “liking” you on Facebook. “What’s the actual impact on my business?” Pierson suggests advisors ask. “How do I know I’m really getting more benefit? What are you going to use as a measurement tool to find out?” More clients and increased AUM are good indicators, of course. So is an increase in the number of referrals. Advisors can also regularly survey their clients to gauge changes in perception, and client satisfaction with their new level of advisor interaction.