The wealth management industry has been slow to embrace and understand how to harness the power of social networks in their organizations. However, with a billion people on Facebook and 200 million on Twitter and LinkedIn each, there’s no question that your customers – both young and old – are already there. Clients today expect their advisors to interact more often, to offer them more personalized service and to communicate when and where they want.
A recent 2014 survey by PAM Insight of financial advisors shows that, compared to last year where only 67.9% used Linkedin, this year that number has increased to 83%. The other network that was mentioned was Twitter with 54% having corporate Twitter accounts. The future also seems bright for social media initiatives with over 72% planning to increase spend in the next year.
Hearsay Social recently had the opportunity to dig behind these numbers when it partnered with Financial Services Forum to host a meeting with heads of marketing from some of the largest wealth management firms in UK. A roundtable discussion on the state of social media and the challenges facing this industry brought to light three key challenges and strategies to overcome perceived barriers:
When it comes to the biggest barriers in adopting social, compliance and risk took center stage. PAM Insight reports that “as with previous year’s survey, 66.7% of advisors stated compliance as the main concern.” But the problem here was less about specific requirements and more about the fact that there is no clarity on what the rules are, which has paralyzed many companies into taking no action.
Recent guidelines from FCA were applauded by the group to be a move in the right direction but there were still a lot of questions on what FCA will and will not accept. There was agreement that the industry can’t wait indefinitely for the rules to be clear, so companies should start by implementing some basic social media strategies:
- Provide advisors with a pre-approved library of content
- Enable a workflow to automate content approval
- Adopt a third-party system to capture social conversations and archive it.
Another area that sparked a lot of conversation amongst the group was content. How do you differentiate your content from your competitors? How do you ensure that your content is not “spam” for your customers? And, more importantly, how do you shape the conversation on social media?
This concern was consistent with PAM Insight’s finding that showed 64.3% of respondents were concerned about lack of control on what content is communicated. After much discussion on this topic, attendees agreed that the best strategy to overcome content issues is education. Education on how to represent yourself online in a manner that is true, trustworthy and personal. Education on the right type of content for the right audience. And education on regulatory risk and social media policies of the company.
Most participants feel that social media moves too fast. If you want to be on social media channels, you need to be prepared to respond in time. Many people spoke about the compliance process and the length of time it takes, often making social conversations less relevant by the time they are ready.
Since introducing any change takes time, it is imperative that companies start now to understand what social media can do for them and take incremental steps to help their people build relationships online. Creating cross-functional teams with marketing, sales and compliance and educating themselves on how social media works are a couple strategies that can help with timeliness and embracing these new channels of communication.
Overall the impact and benefits of social media dominated the conversation. This is again in line with the survey results of PAM Insight. The survey showed that 61% of advisors believed “building industry presence and credibility” was the biggest benefit. While 44% said attracting clients and retention of existing clients (80%) were important benefits of social media.