Novarica: Profiting From Social Networking Takes Work

Consultants at Novarica, an insurance technology research arm of Novantas L.L.C., New York, make that argument in a new analysis of financial services companies' use of social networking systems.

The consultants write that:

• Social networking tools mesh well with online trading tools.
• Few wealth management firms outside the self-service online brokerage industry are making much use of social networking tools.
• Wealth management firms that are late to the party may miss opportunities to increase client loyalty and capture Generation Y investors, the consultants
• Allowing advisors to interact unsupervised on Twitter and Facebook could be a fast road to a compliance disaster. To handle compliance concerns, wealth management firms must build social networking into their own sites, on their own servers, the consultants contend.