New York University: Social Media Opportunities in Wealth Management

Creating Social Media Opportunities in Wealth Management: A Fad or a Fast Evolving Reality?

Capstone by: Akanksha Ahuja

@Twitter: akanksha_ahuja

N e w Y o r k  U n i v e r s i t y – S c h o o l o f  C o n t i n u i n g

a n d P r o f e s s i o n a l S t u d i e s

P u b l i c  R e l a t i o n s  a n d C o r p o r a t e  C o m m u n i c a t i o n

P r o g r a m

Faculty Adviser: Prof. Robert F. Noltenmeier

Submitted on May 10, 2012

Creating Social Media Opportunities in Wealth Management: A Fad or a Fast Evolving Reality?

ABSTRACT
Businesses changed when email came to life; they changed again when websites came to life; and now they have changed again as social media has come to life. Social media has transformed not only our world and our perceptions, but also our daily experience. We share our everyday activities with friends, with family and even with businesses via social media. But what are the limits within which we freely share information? To what extent, for example, can we talk about money on social media? Even though the growth of social media is well documented, leading financial institutions and wealth managers have not embraced it. This paper explores the potential for social media in wealth management. It seeks answers to questions about the scope and role of social media in wealth management, and how wealth managers and potential customers can build relationships while ensuring the privacy of financial information. Drawing on interviews with social media strategists, the paper highlights that young, high net worth individuals rely on social media as a way of life. Social media has the capacity to connect financial advisers with potential clients. But to leverage social media effectively, it is important to train employees and to develop a governing policy and compliant social media strategies.

CLICK HERE for the Full Thesis on  Creating Social Media Opportunities in Wealth Management: A Fad or a Fast Evolving Reality?  Brought to you by the thorough research of Akanksha Ahuja @Twitter: akanksha_ahuja and New York University School of Continuing and Professional Studies Graduate Program in Public Relations and Corporate Communication.

What does that mean for business? You’d better find a genuine commonality that you can share and develop with your existing clients and prospects.  In this way, you can show them that as a brand you have a soul, the brand isn’t lifeless. Corporate America shouldn’t be about pitching commoditized products and services, all the while pretending to be interested in who and what their prospects care about.  There needs to be a connection.  That connection can be as simple as the love of the game of football—yes, football.

New York Life's Protection Index

I digress.  New York Life Insurance company, known as “the company you keep,” has started to humanize its brand.  On Facebook, they created a “Protection Index.” Simply stated, the index rates and determines how well your favorite NFL team’s offensive line protects the quarterback.  ”Just as an offensive line is designed to protect its quarterback’s blind side, New York Life offers life insurance products that protect individuals, families and businesses from unforeseen circumstances,” said Mark W. Pfaff, executive vice president, of New York Life.

This great “human” approach was received well by the fans and followers of all NFL teams, the bloggers covering the NFL teams, radio and TV commentators, and the NFL players themselves.  Every week, more and more fans were exposed to the Protection Index and were immediately interested to see how well their team was doing.   It was being spread on Facebook, bloggers were Tweeting about it, articles were written, NFL team websites and game day announcers were sharing the story, and videos were being made.  Even New york Jets Super Bowl III underdog and MVP, Joe Namath made a vlog post about the Protection Index.  All methods of media drove curious fans to the site.  Through those methods, the campaign spread like wildfire.  New York Life gave the football fans what they wanted, and then subtly extended their careful message to their newfound fans.  They made it easy for them, as the quarterback of their team, their family to check and see if they had enough life insurance coverage to protect their family, if they were “blind sided” by life.  Brilliant!

Twitter Feed Mentioning the Protection Index

In my eyes, the campaign was a big success, but how can it have been bigger?  How could New York Life have made their marketing campaign better?  They could scale it—they could try to reach more eyeballs!  Aside from spending millions on a commercial during the Super Bowl, I came up with another cost effective way.

My system incorporates the incredibly powerful infrastructure Twitter has created.  Most brands use Twitter all wrong.  They use Twitter to blast out messages to the masses, going sight unseen by their target audience.  If they Tweet their “Protection Index,” how many people will really see it?  Most people are viewing Twitter on their mobile phone, and if they aren’t staring at the screen they’ll miss the message.  When the NFL teams and blogs were Tweeting out about the index, it did drive traffic, but what if you could drive more?

For example, here is the Twitter account for the National Football League (NFL). They have over 2,990,000 followers, which are fans of the NFL and the New York Giants.  Here is that commonality we were talking about when looking to humanize a brand.  We could have 2,990,000 one-to-one conversations about football and drive them toward making that human connection.  We could also have our customer service team monitor their conversations, and when they talk about something relevant to football, we can talk to them and link them to the page.  The Tweet wouldn’t be an interruption to the prospect because the “Protection Index” is relevant to them.  It would be in the flow of their conversation.  As an insurance salesman, you can’t say that’s the case with a phone call.  The phone call is an interruption to the prospect.  Why wouldn’t you leverage Twitter’s infrastructure for sales?

Twitter: National Football League (NFL)

If 3 million prospects are too many, we can drill down to specific NFL teams.  Here is the Twitter page for the New York Giants. They have over 274,000 followers, which are fans of the NFL and the Giants.  When you drill down, the commonality becomes stronger.

Twitter: New York Giants

Here is an example of a New York Giants blog’s account. They have more than 25,000 followers.  Do you think these passionate fans are interested in New York Life’s “Protection Index” to see how well Eli Manning is being protected in the pocket?  They sure do!

New York Giants Buzz

We can organize all of those Twitter users into Twitter lists and have our customer service team monitor those conversations.  Once there is an opening to enter the conversation, after some small talk you can then drive them to the value add of the “Protection Indexes” landing page.  The customer service team is already in front of a computer; why not leverage their capacity?

The point is, why wait for people to come to you when they are right there for you to put yourself in front of and speak to?  It makes total sense to take advantage of this and join the relevant conversation.  For one, you have already spent the money creating the campaign.  The point of the marketing message is to drive more people to the ”Protection Index” to drive awareness of the brand and explain how it could solve a problem, eventually leading to increased sales and client retention.  The second point is that Twitter has organized and identified your target audience; they are there for you to talk to.   Through social technology, you can communicate to them in a human and meaningful way.

Adding this strategy to an already successful strategy will not only score a big touchdown, it will surely win the game!

Social Media Networking Clock: Time for Social Networking

Where Does the Time Go?

Financial Sales Professionals Have “NO TIME” for Social Media.  That is a common excuse among the status quo.  We all have the same amount of time in a day, no more, no less.  Everyone’s life is busy, everyone wants more time.  How do you get more time?  Stop wasting it!  You simply need to be more efficient and effective with your time.  You might not be able to put 25 hours in a day, but if you complete your urgent and important tasks without wasting your time with  all of the distractions around you, you’ll have more time to do other things.

Time Waster

Why waste time on old methods that simply aren’t as effective as they used to be?  People don’t waste time these days getting from point A to point B in a horse drawn carriage; they hop into their car.  The horse and buggy works, but it’s not as effective.  You need to take care of the horses, clean up after them and feed them. They cannot do 80 MPH down the highway.  You save time, by using a car instead of a horse and buggy.

Social Media Efficiency

When used as a sales tool, Social Media is not a distraction.  If you take the time to understand it, the information it provides you with, turns into currency in your pocket.

All kidding aside, how do you think God knows everything?  Social Media!

Communication has changed.  If you don’t see that, then you have been living under a rock.  This is why I cringe every time a financial sales professional says he has no time to learn about social media, no time to develop a strategy on social media and no time to execute actions on social media.

What I really hear him saying is that “I don’t have time to get to know my clients and those they care about,” “I don’t have time to interact with my clients.” “I don’t have time to efficiently and effectively find more people to help!”

What to Do?

I digress.  Below I outline effective uses of time for a new financial advisor, a financial advisor who is trying to get to the next level, and for a more established, older financial advisor who is coasting and is happy with the status quo.

1) New Financial Advisor – Where’s my first appointment coming from?

When I see a new trusted financial advisor starting out, where does he get his leads, let alone prospects and clients from?  I am sure you would agree, a good place for him to start would be to try and convince his rich uncle to trust his assets with him.  Financial advisors, and Insurance agents especially are told to sell their solutions to their family and friends, just to give them a base.  They already know, like and trust them, so why not? I guess it’s a start!

Good advice to a new advisor just starting out, wouldn’t be telling him to come in to the office and sit down and dial phone numbers “cold” out of the phone book until his finger is bleeding.  A financial advisor cold calling for clients is no longer the effective way to go.  How many times do you want him to get hung up on before he quits because of the constant rejection?  Maybe 20 years ago it was a better approach, and the advisor would have had some success smiling and dialing.  Communication has changed, and Cold Calling in no longer as effective as it once was.

Think about it…  how could you accelerate the family and friends strategy above?  Social Media.  Since you are urged to start with family and friends, Linkedin, Facebook, Twitter and Google+ allow you extend your social graph more efficiently and effectively in less time!

2) Advisor Trying to get to the Next Level – Where’s my next appointment coming from?

Social media is a no brainer here.  The advisor is at a point in his career where he is experiencing inconsistent income and may potentially be losing clients.  He is not seeing the same results that once were from some of the more advanced “old school” marketing tactics.  For instance, the “fish bowl shuffle” where they are going around putting fish bowls for patrons to put their business cards in and then buying them lunch, in hopes of landing a new client.  They are frustrated because they are putting in the effort, but not getting anywhere.   For an advisor that is looking to find a more consistent way to locate, win, grow and retain his clients, whether he knows it or not, Social media is vital to his survival.

Social media is about People, People are Prospects and Clients.  Through social media, prospects and clients are letting you in on who they are, and what they care about before you can even ask them an open ended question!  On social media, they are giving you relevant and actionable information.  Advisors need to realize that this social information is currency.  It is their job to use this information well. It’s not hard to figure out what you have to look for, where to look for it, and how to transform the information into an opportunity.

3) Established Financial Advisor – I don’t want any more appointments

More established advisors, put in the hard work and effort over the years.  Their businesses are well established.  They are now set in their ways.  I strongly feel that the established advisor has the most to lose by not using social media.  When they are ready to sell their practice, Social media is easier for them, they already have the clients.

For more established financial advisors (any advisor for that matter), I can’t stress this enough, bring your offline client base (World) online.  The more networks you connect with them on, the more actionable information and incite you will reveal.  Start with Linkedin, in most cases they will put their website and Twitter handle for you to access, making your process easier, and then quickly branch out to Facebook.

Please, please don’t use the excuse that my clients are too old, and they have no interest.  They are interested.  Just like when the VCR was introduced. Older generations did not know how to use it, but they watched videotapes, just like the DVD player, the Internet, and now social media.  I’m just saying, Apple TV?

Educate your clients (heck tell them to invite their friends), it would be a great idea for a seminar.  Add personal value to them through social media education.

Aside from the amazing connections you will make with your client’s network (the ones they care about) and the endless referral opportunity.  When you are ready to retire and sell your practice, you’ll get more money for it.  Through social media, you will be able to establish and deepen the relationships with the beneficiaries of your clients, because you now will have access to their lives.

Social “Time Block”

Many social media strategies can be implemented effectively in as little as 5 to 10 minutes a day.  At first, I’d recommend spending 30 minutes to 60 minutes a day on social media.

Please don’t use time as an excuse.  Replace a “call block.”  Successful financial advisors religiously block hours of time to make phone calls, called a “call block” simply take half of your time allocated to your “call blocks” and allocate that to a “social media block.”

Additionally, It would be a good use of your personal time, to help jumpstart the process.  That personal time where you’re sitting in front of the TV, playing games on your iPhone.  Instead of playing games… network.  You can even keep your social strategy going while you’re going to the bathroom.  Your mobile device, smartphone tablet… helps you continue your prospecting, monitoring and engaging round the clock!

Have any Social Prospecting Tips for Financial Advisors or other Sales Professionals?  Add your knowledge and experience below!

Click on the link below in the Twitter message for a guest blog post I wrote for Benchmark Email.  I cover the starting point and context for a financial service professional to get started in social media.

Financial Social Media Marketing 101 http://t.co/JLpZ8eAM @richlopresti

April 23, 2012 8:30 pm via BufferReplyRetweetFavorite

@BenchmarkEmail

Benchmark Email

In the Interview we talk about how Financial Institutions and Financial Advisors can begin to incorporate Social Media into their daily routine:

Great chat with @RichLoPresti - 3 Solid Tips to Help Financial Advisors Get Social - Radian6 http://t.co/cXBivIQe

April 20, 2012 12:26 pm via Tweet ButtonReplyRetweetFavorite

@Julie_Meredith

Julie Meredith

Related Article: 

The “Common Sense” Way for a Financial Advisor to Get Started in Social Media

State of Financial Social Literacy in the Financial Services Industry!

Penton Media’s Registered Rep and WealthManagement.com conducted an online survey in September, 2011 and February, 2012 for financial advisors.  The survey sought primarily to determine the social media presence among advisors from all channels, as well as examine the business purposes for which social media is used.

The report A Day in the Life of a Financial Advisor: Current and Future Social Media Trends surveyed approximately 1600 respondents in September 2011 and more than 1400 respondents in February 2012 and highlighted a few meaningful trends and change in the industry.

Advisor Demographics

Advisors had on an average 220 clients, and an average $86.4 million in assets under management.  A majority (29%) were affiliated with a wirehouse or national firm, or worked for an independent broker dealer (24%) and served primarily as a financial planner (34%), wealth manager (17%) or investment manager (14%).

How Advisors Spend Time

Advisors spend over 50% of their time on client management and prospecting.  For the next 12 months, however, many advisors expect client acquisition through prospecting to be the leading driver of business growth.

To help them keep up, many advisors have turned to social media.  The survey found that a majority of respondents indicate using social media for one or more business purposes, with networking and client prospecting being the most popular.  Between 2011 and 2012 social networking activities increased by more than 10%, whereas those using social media to keep updated on industry news decreased by five percent during the same time.

Still, approximately 43 percent of advisors do not use social media for business purposes.  Though, 74% of respondents who do not currently use social media for business purposes are interested in learning more about how to use social media for prospecting, marketing and client communication.  This clearly shows that financial advisors want to learn how to incorporate compliant social media into their practice.

Social Media Trends

The survey showed that over one in four advisors have landed clients from social media efforts. In most cases, the social media connection followed a more traditional first contact. However, clients acquired from social media prospecting had a smaller average portfolio.  Nearly 10% of advisors indicate the average portfolio size of clients acquired through social media is larger than $500,000.  Once Investment representatives learn how to properly use social media for business growth, that number will go up.

What platform are advisors using the most?

LinkedIn activity dominated (84%) social media usage among advisors, followed by Facebook (28%) and Twitter (16%).  There is a goldmine of opportunity on these underutilized social networks.

What types of content are they sharing? Receiving?

Interestingly, many advisors stated that they are unlikely to send content or communications to clients using social media. Those who do are likely to create their own content or use content created by their firm.

Currently, only 13% of advisors receive information from product providers via social media, though half indicate they would be interested in receiving it.

Social Media Challenges and Concerns

The survey showed that for many advisors social media policies help guide their activity and presence on social media.  Advisors from Wirehouses and bank brokerages are most likely to have a written social media policy, while RIAs are least likely to have a policy in place.

For those with policies in place, nearly two-thirds of firms prohibit the use of Facebook, YouTube and Twitter for business purposes.  More than one in four prohibits the use of LinkedIn.  For a financial professional to succeed in the future, this needs to change.

Compliance is considered to be the primary challenge when using social media, with advisors showing concerns about compliance and regulatory aspects of using social media.  Advisors are most uncertain about how to answer questions, if they can share opinions or advice with clients.

There’s good reason why compliance should be a concern as most respondents indicated that they do not actively archive their social media interactions. Fewer than one in ten advisors personally archive social media interactions, while an additional 17% indicate this is a function of their firm.  22% of respondents are unsure if their interactions are archived, while 33% of respondents from wirehouses are unsure if their interactions are archived.  Clearly, there is a high percentage of registered investment advisors are on social media, where is the social media education?

Where to go from here?

Advisors already on social media should be pro-active and reacquaint themselves with FINRA policies and those of their companies concerning social media activity.  They can also develop effective strategies for using social media to actively listen and monitor prospects, and clients, looking for the reasons that are going to influence their buying decisions.

Maximize your social media efforts?

Assess how effective your social media efforts have been, and learn how to take your efforts to the next level by utilizing RecommendedAdvisor’s FREE social media assessment: CLICK HERE for your FREE ASSESSMENT

Similar study from American Century Investments

Enjoy Pat Allen of Rocktheboatmarketing’s perspective of American Century’s report: Really? LinkedIn Groups Are Asset Managers’ Most Important Social Media Offering?

Is the Financial Service Industry Bearish on Social Media? A Bear’s Perspective: The Glass is half empty for Financial Advisors

A Bear’s Perspective: The Glass is half empty for Financial Advisors

At a brand level, and on a customer service level most big financial institutions have embraced social media.  But, they have lagged behind in granting the power of social media to their distributed sales forces.  Aren’t they the ones who keep the lights on?

Have you figured out what the number one reason why the financial services industry is bearish on social media?  Because, I haven’t.  If you already know, stop reading and share with us your thoughts in the comment section.  I want to know.  If you are as perplexed as I am, at the end of my diatribe, decide for yourself if the reason is among the areas I cover.  In any case, be sure to share your thoughts with our readers in the comments section below!

Is the number one reason why financial institutions are bearish on social media compliance?  Maybe.  FINRA, SEC, NAIC, and CFPB oh my! It’s a good argument—why would a financial institution want to get fined for something that they don’t understand?  For compliance sake, how would they know what to do?  The regulators keep changing and revising their policies, and revising them again, and again.  How can a financial institution, let alone a financial advisor, keep up?

Who is the Business Prevention Unit? Is the Compliance Department to Blame?

This is absolutely crazy, but here is a possible solution.  I hear stories that FINRA wants financial firms and institutions to reach out to them so they can work together to figure out this social media stuff.  Financial institutions and FINRA working together in harmony to develop some real-life social media case studies to shape social media policy.  I hear the financial institutions now, “Really, you want me as a financial institution to be proactive and voluntarily go to the regulators? I understand what you’re saying, but I can’t believe that’s something the financial institution really wanted to go to the regulators, volunteer to be a case study… We’re not fully buckled down with traditional media.  We can’t go to them so they can look at us and see what we’re doing internally, I don’t want to open up that can of worms.  Why would I want to invite in a regulator?  It doesn’t make any sense.  Not to me it doesn’t.”

Regulation aside, financial institutions want to protect their brand.  Listening in again on their conversation: “Brand Reputation is big for me, why would I want all of my reps out there Tweeting? Posting and texting and messaging and doing all sorts of social sales stuff?” I mean, they are pushy right—we are trying to push our commoditized product.  So why would we want to push product where everybody can see it, and be recorded forever?  What happens if the collective “we” messes up?  Everybody in the world will be there to watch.   Why would we want to do that?  Who is really listening on social media anyway?   Employees, competitors, clients, prospects, everyone? Well, if we started talking on social media, I hear you can’t control the conversation. I can’t get over that.  If I can’t control it, the conversation can and won’t be safe.  If a social media fire started, how do you put it out?  Once you say something stupid, you can never take it back, you need to live up (or live down) to what you said and honor your actions to make it right.

Additionally, aren’t their legal ramifications for financial institutions and advisors? What’s at risk?  Social media puts the multiplier effect on personal versus professional.  Is the employee they hired the same person (business or pleasure)?  With social networking, the lines are more crossed than ever.  For example, who owns the social accounts if we allowed them—the company or the employee? They might spend time working for us just to run away with the information and the relationship.  Reference this enlightening article from the Wall Street Journal: Covering a dispute over who owns a Twitter account, and a similar fight over a LinkedIn account.

It’s getting kind of hairy; maybe it’s better if we turn the other cheek and look away, we won’t notice all of our financial advisors who are already using social media on LinkedIn, Facebook, Twitter, Youtube, Google+, and Pinterest. I mean, they are on there for personal reasons, right?  We can’t prevent them from bringing those “smartphones” into work anyway. If they do happen to get new business from it, good for them (I mean us).

FINRA Suspends Advisor

Just say we did want to embrace social media, it would be easy to implement, right?  David B. Armstrong of Monument Wealth Management  said in reference to social media,  “If you are Series 7 registered, you should already know what to say, and what not to say.”  That sounds about right. It’s just a new way to communicate. We’ve been in the same industry for years.  That’s a good thing because we don’t have the time or the inclination to educate our advisors on social media.  Oh, wait, slow down.  Did you see what happened to her? She was Tweeting, promoting, pumping, and dumping stocks on Twitter.  We can’t control our reps, why did we hire them?

Read more later about her case, if you want to know what not to do… FINRA Suspends advisor for social media communication.  Bottom line, Know your customer.  Don’t blast buy or sell recommendations to random people.

Then again, if we did allocate the resources to training, like I mentioned before, we just don’t have the time.  Honestly, why would any great sales manager take time from activities that are already working and bringing in business, to suddenly change an advisor’s structured activities to add in a medium that is not yet proven, at least in our eyes?  I can’t see the justification for our established representatives.  Additionally, how do you monitor it all?  How well have we monitored traditional media—are we exposed?  Our monitoring was never 100% and never will be, we are fallible.  Social media can’t really be a gift to the compliance department; everything can’t be recorded, achievable, traceable, trackable, measurable, right down to its origin, right?

When you think about it, there is only close to 1 billion people on Facebook, and another half a billion on LinkedIn, 300 million on Twitter, and God knows how many people are on Google+ these days.  So if there are over 1 billion people on social networks, that means there are 5 to 6 billion people who aren’t using social media, especially for business.  So why should we?

Even if we do use social media, the people with money, those boomers, they’re not using social media, are they?  What interest do seniors have in using social media?  There isn’t an entire cottage industry teaching our most profitable demographic on how to use social media, is there?  I mean the fastest-growing segment can’t be among 55-year-old woman on Facebook, right?  It must be a fluke that my 68-year-old dad just bought an Amazon Kindle Fire, what’s he going to do with that? Generation Y are getting older (which means they’re accumulating more money), but anyway everybody’s not utilizing social media, so why should we?

How we used to communicate, and still should

Time, time, time—we don’t have time like I mentioned.  We have all of these other operational activities that we have to do.  Why in the world would we take time from prospecting strategies that are working, like knocking on doors, in person meetings, client appreciation events, seminars and the telephone? I mean, the telephone still works right?  The telephone has been closing down business since 1876, and besides, the phone went mobile in 1973.  Production, is sure to go down.  As it is, representatives have so many different activities and responsibilities. They don’t have time for one more dial, let alone social media.  Hey, I love my corner window office—I don’t want to be a social mobile advisor.  Besides, we don’t have to worry about any FINRA 10-06, 11-39 regulation on the aforementioned modes of communication, right?  How compliant is all of the other media (The social in-person meeting, social phone, social letter, social e-mail, social fax, social seminar, social water-cooler talk, social bar, social seminars, social client appreciation events, social everything) we’ve been using?  Even though we don’t have a social media policy, I guess we are no stranger to similar internal and regulatory policies for, record keeping, archiving, suitability (Know Your Customer), communications with the public, advertising, supervision and endorsements. We just started using email, how different can social media be?

Again, I’m not going to do something that I don’t know how to do. I don’t have the time to take away from producing activity to a non-producing activity and, I don’t really have the time for an education; those days of continuous learning are over.  I’ve been doing this for years. I have spent hours and hours getting my CFP, and my Masters and all of these other NASD designations and licenses.  I’m not going to spend time on social media, not me, no way. Social media is for kids, right?

I’m not registered to sell in all 50 States; there aren’t any boundaries on social media.  All I know is that I’m not risking my licenses and reputation and getting in trouble on social media.  I’m not putting myself out there, no way, no how.  So what if everybody is going mobile and will be able to find me if I put myself out there to be found?  Come on now, we can’t rely on the Internet, let alone social media.  What if the Internet crashes—what happens then?

But then again, where’s the return on investment (ROI)?

I plan on getting a nice return (viewership) on ignoring the topic of ROI.  My next blog post will be dedicated entirely to exploring social media ROI for the financial services industry.

If you or your firm would like a free social media assessment to determine where you stand, Learn more here:

FREE Online and Social Media Assessment

I invite you to share your thoughts below:

Common Sense for Social Media

What’s the right way for a regulated financial professional to get started in social media?

Be there, be you, be authentic, be creative, and demonstrate that you actually care to help others.  That’s it.

Unfortunately, for financial advisors, it’s easier said than done.  These days, advisors are being regulated not only by the industry, but also by their firms’ policies as well.  Most big firms’ policies, by nature, have stricter interpretations of the regulations.  Why you ask?  For a number of reasons, but the most pressing is they need to protect the brand.  In a lot of cases, these large firms haven’t even done that, social media or not, but that is for another post.

Step 1: Creating Your Online Identity

There is a blurred line between personal and business.  Let me ask you a question: When you meet a prospect for the first time, do you only talk business, or do you try and make a connection with them on a personal level?  Most successful advisors don’t talk about the weather; they try to find a commonality with their prospect beforehand, or try to find one on the fly when they meet them.  The clothes they are wearing; the nice watch on the prospect’s wrist; the car they drive; the hat with their favorite team’s logo on it.  Let’s face it—to be successful in “offline” real-world business, you need to bring your personal personality into the mix.  It’s the same with “online” real-world business.  Looking at the two worlds separately doesn’t make sense.  The worlds are connected.

When you create online social profiles on Facebook, Linkedin, Twitter, and Google+, it’s really not a crime to tell people what you do, who you help, and how you help them.  Your bio is everything. You only have one chance to make a great first impression.  Same concept when you go to a party offline—basic conversation is going to lead you down that path.  It’s just a natural conversation flow.  For instance, if you are at a personal life party, it’s only natural to bring a little business into the conversation.  It’s not your fault; it’s part of you.  People are curious to see what you do, and how you can help them.  Again, you are not breaking any laws if you tell someone on social media what you do for a living, why you do it, and how.  If someone tells you otherwise, they need their head examined.

Please Be There:

Being on social media will allow you to be found.  It’s the first step.  In the offline world, you have business cards right?  Do you give them to people?  Do you pin one to the bulletin board at the library, drycleaners, restaurant, or post office?  You are putting yourself out there, so, at the very least, one additional person can find you.  Think of your online profiles as your business card. Instead of you handing the card to a prospect and having a brief introductory conversation, let the words on your profile do the speaking for you.  Please let your compliance officer read this if they won’t let you have a profile, they may not understand.  Why wouldn’t your company want you to proudly display their name next to your name?  They hired you to represent them, right?

What’s wrong with this picture?  On Linkedin, how can a financial advisor with a Certified Financial Planners (CFP) designation, a Chartered Retirement Planning Counselor (CRPC) designation, and a Chartered Mutual Fund Counselor (CMFC) designation, not even mention on their profile that they are a financial advisor?  The firm he works for has a company page on Linkedin. Isn’t that social discrimination?

Linkedin Profile: What not to do

Here is a representative from the same firm. He mentions that he is an advisor, but still doesn’t mention the firm’s name. Weird, right?  It is in your best interest to complete the picture for the viewer.  You never know who is going to view your profile. The viewer could change your life!

Linkedin Profile: Getting better, but still not right

In this Linkedin profile, you finally get a complete picture of who the advisor is.  If you visited his Linkedin page, you would find the answers to the three important questions: who you are, what you do, and how you can help.

Linkedin Profile: Finally a good profile

Step 2: You think before you speak, don’t you?

Advisors are coming to me all the time, telling me, “My compliance officer won’t let us do anything other than Linkedin; they won’t let me Tweet; they won’t let me blog; forget about Facebook (even though I’m on it for personal use); what can I do?”

Again, this is where that blurred line is between “personal” and “business.”  On Facebook, as a person, you can talk to people, and you can see if you can help them.  Personally, of course.  I outlined some great strategies you can use to get you started.  As Gary Vaynerchuck, Founder of Vaynermedia had predicted, we are going back to “old town rules” where everyone knows everyone.  Bob the butcher knows you.  He knows what you are going to order and has it ready for you before you even ask for it. Why can’t a financial advisor follow that same tact?

Want to blog?  It is my humble opinion that independent advisors have the advantage, simply because big firms want to promote their BRAND, and not the individual, unique, talented reps they have representing them.  With that being said, open-minded firms realize that social media allows an advisor to differentiate themselves from the commodity that they sell.  Here is a traditional branding example that may shed some light on the power of differentiating yourself.  Do you answer your phone with your full NAME first or your FIRM’S name?  A 40-year vet of Merrill Lynch told me once that he always answered the phone with his full name only. One of his top clients referred a client to him and couldn’t remember the firm he worked for, but did remember his name.  Guess what, Merrill still got the business.  They may not have gotten the business if it weren’t for the unique style of the innovative representative.  How can you differentiate yourself?

Surely not like this next example—Tweeting on Twitter.  Did this Tweet damage Morgan Stanley Smith Barney’s social reputation?

Twitter: Danger of pre-written tweets

I personally don’t think it did, but it surely isn’t helping.  When 600 (potentially 17,800) advisors could send out the same message, yikes!  Talk about corporate spam!  The compliance fear being alleviated here by crafting canned Tweets most is taking the authenticity out of their online communication.  In this picture you can see multiple (MSSB) advisors Tweeting the same Tweet at the same time.  Do you think they all speak to clients the same exact way as well?  I don’t think so.

In my opinion, there is a simple solution for this.  I have no problem with MSSB treasure trove of pre-approved content.  It helps the advisor with time management.  What MSSB should simply do is put RT @MorganStanley and have the message come from their account and ReTweeted from the individual advisor’s accounts.  It’s more authentic, and proper Twitter etiquette.  The RT is a confirmation from the representative on the material from the firm.  Advisors are fearful of ReTweeting content because of FINRA guidelines, but if a Tweet was approved by the firm, and it’s the firm’s material, there is no harm in ReTweeting the content.

Getting the Message! Morgan Stanley Smith Barney started Tweeting Today! Yeah!

Recently, this Tweeting style caught the attention of New York Times writer William Alden.  After I read his article, I posted on Facebook OnWall St., Keeping a Tight Rein on Twitter, with a comment on how I dislike canned Tweets and within seconds Twitter agreed.  In this image you can see the authentic conversation about the un-authentic posting style.

Twitter: Authentic Twitter conversation on Twitter

As Lauren Boyman, who runs social media at Morgan Stanley Smith Barney, says they are “trailblazing, so to speak, even with the restrictions that we have, we’ve seen a lot of success.”  Kudos to Lauren—many big firms have only embraced social media at a brand level, and not at an advisor level.  More so, it seems that they are well aware of the drawbacks of the pre-written Tweets and have started a pilot program of 20 financial advisors who can be themselves and craft their own Twitter messages. With the help of Socialware, they are streamlining the compliance approval process.

Power of Social

Fay DeBellis, a Morgan Stanley Smith Barney Advisor, may be canned Tweeting on Twitter, with her 46 Tweets (as of this writing), most of them pre-written, there is no surprise in the fact she has not developed any business from Twitter.  Don’t let those facts fool you, twitter doesn’t represent the entire social story.  She happens to be very successful on driving business through other social networks. On Linkedin for example, she has brought in a whopping $10 million worth of business during the last year and a half.

Twitter: Fay's Social Profile and Pre-Written Tweet

One of Fay’s colleagues Mitchell Rock, a Wealth Advisor for The Rock Group, has also had success on Linkedin.  His group’s Linkedin strategy generated 28 percent of The Rock Group’s revenue last year, which included a $70 million whale of an account.

Bottom line: Social media can grow your business even if you don’t understand how to fully utilize its power.  You need to start.

Compliant Social Compliance:

From my compliance experience as a NASD series 4, 9, 10, and 24, I had firsthand experience with managing compliance.  I was responsible for keeping the branch representatives in compliance.  I must tell you that, with the right tools, all the other modes of communication (phone, mail, fax, in person) cannot be tracked as effectively as social media. Nothing is 100 percent.  All firms are having compliance audits done on them for traditional media; it’s always a challenge.  Through technology, social media is the only medium that I know that is fully traceable, trackable, searchable, and measurable.  All the data communications are captured and stored.

Social Enablement Technology

Social CRM and Social Media Management and Archiving Systems:

Here are some of the 140-plus companies that can help enable compliant social media.  Actiance, Hearsay Social, Radian6, Socialware, Arkovi, Smarsh, Engage121, Backupify, Spredfast, Expion, Awareness Networks, cloudpreservation, Hootsuite, Shoutlet, Syncapse, erado, hanzoarchives, iterasi, pagefreezer, and LinkedFA.  The list goes on and on.

With the aforementioned companies, the supervision fear that a financial advisor may breach FINRA Regulations by posting inappropriate terms on a social media platform is eliminated.  Similar to email compliance controls, social media management applications used by many financial institutions and banks can prevent an advisor from sending posts and messages including words like “buy,” “sell,” “hold,” “recommended,” “advise.”  This security measure will allow for an advisor to be more authentic, and allow compliance officers peace of mind.  When speaking on social media, this security measure (and others) will allow for an advisor to be more authentic.

This primer should help you in getting started in “Common Sense” social media.  As always, please comment with your thoughts below.  If you have any questions or need assistance with your social media deployment, please let me know, I am here to help!

Need More help getting started?  Be sure to click below and download my free Social Media Primer to help you get started in Linkedin:

Linkedin: The Financial Advisor’s Gateway to Compliant Social Media Bliss (How to get new business from Linkedin. PERIOD!)

and 

Stay Compliant with the Regulation Primer for Linkedin: A Financial Professionals guide to stay in Compliance

Roth IRA Movement

#Roth IRA Movement goes Viral!

The majority of Financial Professionals are struggling to incorporate Social Media into the framework of their practices.   Financial Professionals are well-educated (CFP, MBA, Series 7) individuals, and have amazing knowledge and incite in helping the average person who has chosen their life’s work in a different field.   Here’s a novel idea, why not simply help others solve for a problem before they have one?

To this point today, I stumbled upon the perfect example of what helping others through problem solving is all about.   No joke, through a tweet on twitter from @Vanguard_FA‘s feed something amazing caught my eye.

Vanguard Tweet #RothIRAMovement

Since I am in the field of helping advisors leverage social media, I was immediately intrigued.  I clicked on the link (I also ReTweeted the message [giving Jeff social credit] to my 40k plus twitter followers) and read his blog post in amazement.  Finally, someone got it.  “It” simply means that Jeff has genuinely connected with his audience.   He has added so much value into a simple concept within savings and investing, the “Roth” IRA that has been around since 1997.

How did he do it?

Jeff Rose a successful Certified Financial Planner from Illinois was charged up from a talk he gave at his alma mater, SIU Carbondale.  He asked the simple question to the 50+ attendees from the graduating class “How many of you are familiar with a Roth IRA”?   To his dismay, not one person raised their hand.  Not one single senior has heard of the Roth IRA.  Why not he thought?  After a night of brainstorming, enter the Roth IRA movement.

Jeff's original Tweet that started it all!

Through social media, Jeff used his voice and started to create a buzz.  The power of an idea given new life, coupled with a terrific shareable story has the potential to go viral.  In a sense, it already has.

Being a Financial Advisor myself, and dealing with sixty year olds who have worked their entire lives.  They are struggling making the transition from accumulating wealth while working to distributing their wealth to see when and if they can retire.  I can relate.  Let’s stop this problem before it happens.  Most educated people facing retirement never saved enough and were solely focused on their day-to-day lives.  Obviously, they did not realize the importance of saving for retirement soon enough.

Let’s collectively solve that problem!

Jeff took to the Web and started a movement. Today there are 150+ bloggers and notable Financial Institutions running with his message, a message that was already out there.  However, this message wasn’t being targeted to the demographic that can benefit the most from “control” and “tax free” growth through years of compounding.

#RothIRAMovement Twitter Feed

These powerful financial institutions struggled to get across to younger generations.  Most of them were focused on the generations with the big bucks, not the generations who need help as well, and will inherit wealth from the boom generation.  They have the knowledge and the resources to help educate our youth.  I think they hear the message now, loud and clear!  They need to thank Jeff Rose for giving them the opportunity to connect with the younger generation.

Independent advisors also need to learn from what Jeff has done here.  You don’t need to be a big financial institution to have an impact.  It is easier for an individual to genuinely connect with a niche audience.  Brainstorm, and figure out unique ways to connect with people that you can help.

Even if Jeff gets one person to raise his hand during his next talk, Jeff has won!

Jeff has won!

More BIG TIME Accolades for Jeff’Rose’s #RothIRAMovement:

More Accolades for Jeff Rose's #RothIRAMovement!

Charles Schawb, Yahoo Finance, The Huffington Post, AARP and many others recently joined the #RothIRAMovement.  The momentum continues.  One thing is for sure, Jeff Rose will be forever associated with the ROTH Ira.  I Just added the #RothIRAMovement to Wikipedia

Closing down Business with a Hashtag:

New Business from a Hashtag #RothIRAMovement

Origins of the Roth IRA Movement:

Click here to view Jeff Rose’s Roth IRA Movement

IRA Facts:

Traditional/Rollover IRA:

A Traditional or a Rollover IRA is a retirement vehicle similar to a 401(k).   Money you earn is taken before taxes are taken out and contributed to the account.  You have to pay taxes on the money you take out of it.  There also is a 10% penalty on top of income taxes if you take out money from the account before you reach the age 59 ½.   You are required to start taking out funds at 70 1/2

Roth IRA:

A Roth IRA is the opposite, you put after tax money in the account and it grows tax free.  You do not have to pay taxes on any of the withdrawals, ever, as long as you hold the account for five years.  The benefit of the Roth is the tax free feature.  If you start young, and invest wisely, you can really benefit from never having to pay taxes on those funds again…. ever!

Are you a Financial Advisor? Need help getting started in social media?  Be sure to click below and download my free Social Media Primer to help you get started with Linkedin:

Linkedin: The Financial Advisor’s Gateway to Compliant Social Media Bliss (How to get new business from Linkedin. PERIOD!)

and 

Stay Compliant with the Regulation Primer for Linkedin: A Financial Professionals guide to stay in Compliance

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