Advisor use of social media matures, regulatory requirements are still a challenge

Last week we attended the sold out SIFMA Social Media Seminar in New York City, a one-day event in the heart of Wall Street that brings together experts from a variety of business roles including marketing, business, compliance, and legal, as well as financial advisors, to discuss the expanding use of social media for financial services.

Major themes from the conference included:

• The financial services industry has greatly advanced its use of social media in recent years, but there is still a lot of opportunity for social media to impact the business.

• Interpreting regulatory and compliance requirements continues to be a challenge for firms and financial professionals.

• Social media can be a truly valuable tool for advisors and branches to build their business, especially if they leverage it to expand their client base in a target niche.

Michael Lock (President & COO at Hearsay Social, @michaelhlock) kicked off the seminar with a lively perspective on technology trends and how consumer expectations are changing. In his session, Michael shared some ways in which financial professionals are using social media to build customer relationships. Harking back to a lesson familiar for every good salesperson, he reminded us that social media is about listening first. OnWallStreet author Andrew Welsch (@AndrewWelsch) published a great recap of Michael’s session here.

Here are more key takeaways from the event:

Updates from the social networks

The next session was a panel moderated by Mike White (CMO at Raymond James, @MikeRJF) with financial services industry leaders from LinkedIn, Twitter, and Facebook. Mike set the stage with learnings from a roundtable conversation that a group of SIFMA members had shared the day before: “We’ve come a long way over the past few years, but there is still a lot of opportunity,” he said, however, noting “the importance of not looking to social media as a standalone panacea. [...] The most successful advisors and firms are looking at it as a piece of an overall marketing program.”

The following conversations from the respective social networks followed these same themes. Some of their insights included:

• Brad Murphy (Client Partner, Financial Services Vertical at Facebook) described how the Facebook platform has evolved over the past 18 months. Although many business owners have seen a decrease in the organic reach of their pages, Facebook has greatly expanded its targeting ability with its evolving advertising program. Brad specifically referenced new data partnerships, such as with Acxiom, that help financial professionals reach exactly the audience they’re targeting.

• Jennifer Grazel (Head of Category Development, Financial Services at LinkedIn, @jgrazel) provided insight into the core pillars of focus for LinkedIn: “identity, network and knowledge.” She also explained how the network’s continued push into content publishing and sharing is intended to support the “knowledge” pillar. In addition, she said that LinkedIn’s acquisition of Bizo will support the company’s plans to enable marketers to run nurture programs.

• Michael Wong (Head of Financial Services at Twitter, @mw145) said that when it comes to content, timing and quality is more important than frequency and volume, citing Vanguard and Motley Fool as two organizations that excel at sharing good content during volatile times. He also predicted that, going forward, the focus will be on developing a mobile experience for end users as well as better analytics to measure effectiveness of campaigns and activity.

Static vs. dynamic content and other regulatory requirements

In the second panel, “Navigating The Web of Social Media Regulation,” Rick Apicella (Morgan Stanley Wealth Management), Thomas Selman (FINRA), Doug Preston (Bank of America Merrill Lynch), and Melissa Callison (Charles Scwhab) discussed the regulatory requirements that govern social media use.

Selman, who is responsible for advertising policy at FINRA, summarized how the regulatory authority thought about social media. They “took a principles-based view of social media,” he said, in order to write regulation that would not have to be changed every time the technology changed. And they “tried to leverage existing rules and terminology” wherever possible instead of introducing new terms. This approach lead to FINRA Regulatory Notices 10-06 and 11-39, which directly address social media.

Supervision and review requirements for social media address two key content categories: “static” content and “dynamic” content. FINRA requires that all static content be pre-reviewed before it is published, and therefore what is categorized as dynamic or static is often a hot topic in conversation amongst legal and compliance professionals.

At this event, Thomas Selman notably commented that “a case can be made for why a tweet is considered dynamic content.” Somebody from the audience even asked him to repeat this because this opinion was in contrast to other interpretations of the regulation that we’ve heard.

“Content is king, and context is queen”

After spending the first half of the day discussing mostly advisor use of social media, the panel “Social Media Strategy & Use at the Corporate Level” specifically zeroed in on corporate and brand use of social media.

Ruth Papazian (HD Vest Financial Services) moderated a discussion with Joe Corriero (Bank of America Merrill Lynch), Kraleigh Woodford (UBS Wealth Management Americas), Jon Pauley (Ameriprise Financial), and Melissa Socci (LPL Financial). This conversation kept coming back to the importance of content, with each team member describing how their respective organization sources, develops and distributes content.

It was especially interesting to hear how firms of different sizes deal with the challenges of creating social content. Joe Corriero, for example, said that Bank of America Merrill Lynch created a “social media newsroom,” which is a regular meeting bringing together all the disciplines (including research, marketing, legal and compliance) to brainstorm and plan their content timelines. And sometimes internal teams aren’t enough. For example, Melissa Socci explained that they occasionally turn to contractors to create additional content pieces like infographics for social media because their traditional, print-first content team doesn’t have quite the right skillset for that. With a much leaner team, Ruth Papazian and her team rely upon the integration of Trapit and Hearsay Social to curate a regular stream of social media content.

Kraleigh Woodford from UBS Wealth Management Americas pointed out that, in additional to the common adage “content is king,” “context is queen.” Kraliegh argued that “it’s the ‘why do I care’ factor” that leads to successful social content. Companies don’t have a shortage of content but they have to be thinking about what people want to consume through social media; feeding them the wrong content, like “linking to a 60-page report,” might not be the be the most effective strategy.

When it comes to a corporate presence and approach to social media in financial services, Melissa Socci said it best: “We are not social media marketing, we are marketing in a social media age.”

Social media strategies for financial advisors and client communication

In the second panel moderated by Mike White (CMO at Raymond James, @MikeRJF), five financial advisors representing Raymond James Financial, Wells Fargo Advisors Financial Network, Ameriprise Financial, LPL Financial, and Robert W. Baird & Co. shared some of their most successful social media strategies for enhancing communication with clients and prospects.

One theme that stood out? Each of the panelists has found success using social media a little bit differently–depending on their target clients, location, and team structure.

Evan Shear (Branch Manager with Raymond James Financial) uses social media to stay up with what is happening in the lives of his client. One anecdote he shared: he saw via social media that his client had lost a family pet, and so he sent a thoughtful sympathy card and gift. Fueled by what he learns through social media, according to Evan, this type of activity strengthens client relationships and builds deep client loyalty.

Charles Camilleri (Financial Advisor with Ameriprise Financial Services) uses social media to stay top of mind and to get the word out to his extended network that he is a financial advisor. Within a week of using social media for business, Charles got a new client referral from a friend of a friend, simply due to the fact that they learned Camilleri’s profession after connecting on LinkedIn.

In addition to the financial advisors on the panel, Dan Swift (Director of Financial Services at LinkedIn, (@danjswift) shared insights into social selling and some of the exciting functionality that LinkedIn Sales Solution provides to help financial professionals. Dan described how LinkedIn Sales Navigator solves for the “now what?” feeling that often accompanies users who are new to social media. He recently spent three months on the road training 160 advisors on social selling with LinkedIn, and they saw some amazing success. Within that same time period, a subset of those financial professionals won over $100 million in new investable assets–impressive ROI for a program that was just getting started!

With the various success stories that can be correlated to a social presence, we think financial professionals would do well to take advice from one other participant on the panel, Jamie Cox (LPL Financial): “You don’t have time to not be on social media.” We would agree.