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Practice Management > Marketing and Communications > Social Media

DOL fiduciary rule makes social media more crucial

By Janet Levaux

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Hearsay Social hosted its annual Innovation Summit in San Francisco, with talks by Shelley O’Connor, co-head of wealth management for Morgan Stanley (MS), and other industry leaders.

The event, which includes a debate over the role of robo-advisors in the advisory space, also features speakers from PayPal (Bill Ready, senior vice president), FutureAdvisor (CEO Bo Lu) and Tiburon Strategic Advisors (Managing Partner Chip Roame).

Ahead of the summit, Hearsay Social CEO and founder Clara Shih released a book titled “The Social Business Imperative: Adapting Your Business Model to the Always-Connected Customer.”

In the book, Shih argues that leaders must grasp the “tectonic changes arising from today’s social, always-connected customer, embrace digital at all levels of their organizations and re-architect business practices and models accordingly.”

She brings up several examples within the financial-services space. For instance, executives at Raymond James (RJF) have “found a way to operationalize social media from vision to practice.”

This means that rather than having a separate social media department, the company embraces it from top to bottom. At Raymond James, the firm’s three company presidents are active on Twitter and two-thirds of its advisors are active on Facebook, LinkedIn and Twitter, she says.

In other words, social media isn’t a siloed or marginalized activity — it is a standard (and well-accepted) way of engaging clients, employees and other stakeholders.

Our sister site, ThinkAdvisor, asked Shih to break down the importance of social media in the advisory field.

ThinkAdvisor: What do you think the new DOL fiduciary rules mean for advisors and what they do on social media?

Shih: Under the new fiduciary rules, advisors will need to — now more than ever before — truly know and understand their customers in order to provide trusted, highly tailored advice.

They need to know what’s going on in their lives and when something happens that may warrant an assessment of their financial situation — not just at yearly checkups, but all the time. And social media is the best way to stay on top of these life events and stay top of mind.

Why else should advisors embrace social media to the extent that you advocate?

It’s crucial for advisors to understand the new buyers’ journey and change from simply being a transactional salesperson to a trusted advisor, or what I call a social sales professional. Simply put, the days of cold-calling are over.

Despite clear evidence that push tactics are huge turn-offs for this new generation of digitally savvy consumers who expect and demand to engage with companies on their terms, most advisors and agents are still dialing for dollars and sending out direct mailers that promptly get tossed in the trash. This has to change.

The only way to succeed is to adapt to today’s omnichannel customer who finds and learns about you by doing an online search, and sometimes wants to meet in person, other times wants to call, but more and more due to busy schedules primarily wants to email, text, and connect on social media.

How do you aim to help advisors with this challenge?

There’s a chapter in my book on why salespeople must change the way they engage with clients and prospects, and that provides a four-step framework outlining what an advisor or agent can do to become a Social Sales Professional. 

But what’s more important is that the advisor must know and understand what’s going on beyond how to leverage social for sales, because customers and prospects are interacting with the company on social and digital across functions — whether that’s sales, or customer support, or marketing or HR.

To not understand what everyone’s role is and how they all work together to become a social business is a huge missed business opportunity.

That’s why the book is divided into three parts.

Part One discusses new business models that intersect with and are enabled by social business and millennials. Part two walks across the externally facing functions of an organization and examines how social business is applied in each case. Part three focuses on how to move from vision to execution and how cross-functional efforts can become aligned to create a whole that is greater than the sum of its parts.

See also:

The march to halt the new DOL rule moves ahead

DOL rule headache solved? Dalbar rolling out fee calculator for advisors

A timely discussion of all things “fiduciary”

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