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The Socially Savvy Advisor + Website. Stuart Fross
Читать онлайн.Название The Socially Savvy Advisor + Website
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isbn 9781118959084
Автор произведения Stuart Fross
Жанр Зарубежная образовательная литература
Издательство John Wiley & Sons Limited
Figure 2.5 Top Business Concerns among RIAs
Source: TD Ameritrade
And there's one other critical trend: the aging client base. We all talk about the generational wealth transfer – by some estimates totaling $41 trillion over 40 years – that is taking place. But have we thought about who, really, will be making those financial decisions – and how? By 2020, two-thirds of wealth is expected to be held by women. Already, the majority of women change advisors after the death of their spouses, according to LIMRA research (see Figure 2.6).
Figure 2.6 Top Industry Trends Pose a Challenge
Source: TD Ameritrade
And how are these busy women juggling work, family, and elderly parents? By going online and using their mobile devices. Yes, women continue to rely on the Internet more than men – a trend we saw in the early Internet days – and with new hubs and networks now at their fingertips, social media is the way to connect and engage with them.
So it's a changing world, both for investors and the advisors they work with. Social media clearly will accelerate the pace of that change in the years ahead. And yet, in many ways advisors feel held back in the social world (see Figure 2.7).
Figure 2.7 Asset Managers Talk about Going Social
Source: Finect
While social media use is practiced widely by Americans, many people simply avoid it. Some find the platforms unfamiliar or counterintuitive, while others see little value in sharing and engaging on the Web. Among financial professionals, however, the reasons for avoidance tend toward the technical and the specific. To look at why many in the industry feel held back in social media, let me just briefly touch on the “Four Multiples”:
1. Multiple Platforms– Facebook, LinkedIn, and Twitter all have growing value for our industry, depending on how those platforms are used. But if marketers are just now learning how to use these platforms, how can we expect compliance officers to also understand? Moreover, focusing on any one platform could be nearly a full-time job by itself.
2. Multiple Employees– If you have multiple employees on multiple platforms – or even one platform – how do you track and monitor them? It's enough to make you stop right there: Is it worth the risk to your compliance record? “Let's see how others do” is a common mode of action.
3. Multiple Regulations– Let's not forget the regulators. And this is problem one for many in the industry. You might be overseen by Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), or even the Office of the Comptroller of the Currency (OCC). How do you cope with all of those requirements for approvals, archives, recordkeeping, and more? Of course, no professional concerned about his or her job would want to do anything until they get some green light from officials that it's okay to use social media. But as we'll discuss later, that's one of the common myths. The good news is that regulators seem to be moving more quickly as they, too, embrace social media for their own purposes.
4. Multiple Internal Layers– Thanks to regulations and legacy bureaucracy, particularly at large firms, many organizations have multiple approval layers. It takes time to work through those layers, not to mention instituting new policies to abide by regulatory requirements.
Obstacles to social media adoption are real in the financial industry, but that hasn't frozen its professionals in their tracks. In the last year alone, we've seen major brokerages like Raymond James and Morgan Stanley, top asset management firms like BlackRock and Putnam Investments, and one-man financial advisors and everything in between begin to adopt social media in some way.
It's a channel that can't be ignored. Whether your clients are retail investors or financial advisors, firms are recognizing they have to figure out social media. Marketers are partnering with compliance officers to increase their understanding and ensure the right processes are in place. Many firms are using social media at two levels: the corporate level, for building the company's brand and leveraging content; and the individual employee or advisor level, helping them build their individual brand and customer base.
Here's how it breaks down across the different advisory channels:
▪ Broker/Dealers– Many brokerage firms have taken some initial steps toward embracing social media. For example, Cambridge Investment Research, with some 2,400 advisors on social media, permits them to post on Twitter, LinkedIn, and Facebook, subject to a post-use review. Others, such as Commonwealth Financial, prohibit product recommendations. The majority of Commonwealth's 1,400 advisors operate on at least one social media platform. At LPL Financial, more than 5,000 of their advisors operate on some platform: 36 percent on LinkedIn, 10 percent on Facebook, and about 6 percent on Twitter, former Chief Marketing Officer Joan Koury says. LPL advisors are required to get pre-approval for YouTube videos but, other than that, only static content needs to be approved.
▪ Asset Managers– Asset managers' use of social media truly depends on their audience. I recall meeting with a top consultant to the John Paulsons of the world who said: “They'll never be on social media. They prefer to keep private and operate with their own closed networks.” But other asset managers are embracing social media – indeed, they view it as a more efficient way to distribute education, research, and other content more efficiently. “It's easier than going here to Schwab and there to Fidelity to post our content,” one CMO told me. For now, CMOs and even CEOs at asset management firms tend to view it as an opportunity to build their brand and compete, for the first time ever, against larger, more established firms. As new consumer-oriented hedge funds are developed, we expect that they, too, will embrace social media.
▪ Independent Financial Advisors– Independent financial advisors have an easier time: Many are essentially their own compliance officers. That means no approvals and a more timely ability to get in on trending news or react to a client or prospect. Take financial advisor Jim Ludwick, CFP, formerly with Bank of America and now running Mainstreet Financial Planning. He's tweeting regularly and sending summaries of his top personal finance tweets to his followers. Or Winnie Sun, of Sun Group Wealth Partners, who reports how she's strongly built her client base through social media and snagged a $31 million client through LinkedIn. Indeed, Putnam found that some 29 percent of advisors had acquired a client with more than $1 million in assets via social media.
Clearly, different segments of the financial industry demonstrate wide differences in the degree to which they are embracing social media. But the involvement of individual advisors or firms will depend to a great extent on their ability to adapt to some of the changes already under way. As you or your firm look to use social media, what are some of the key things to watch for?
▪ More communications to record– Whether you're a compliance officer or technology leader, you'll have to address the massive amounts of content that may require approval and will certainly require archiving.
▪ More internal partnering– Firms that are successful work hand-in-hand with their compliance officers. Today's CCOs recognize they can't be gatelockers when the world is quickly moving ahead. Successful firms are working