How social media helps Wall Street regain the trust of Main Street
In my previous blog post, I summarized takeaways from the SIFMA Annual Meeting, where financial services leaders, regulators, and policymakers converged to discuss the theme of the conference (“Helping Americans Succeed, Helping Main Street Prosper”) and how financial institutions can restore the public’s trust and confidence in the industry.
Hearsay Social executives Michael Lock and Kristin Shevis with President Bill Clinton at SIFMA Annual Meeting 2013. In the event’s opening keynote, Clinton said that trust is critical and must be rebuilt; in order to do this, he said that one has to “go local.”
Restoring the public’s faith in the financial industry will take some work, but SIFMA CEO and Senator Judd Gregg highlighted 4 ways to do just that:
Putting clients first
Investing in America
Driving transparency and cooperation
Educating on the importance of the market economy and financial literacy
I would offer an additional strategy to enhance and accelerate the above recommendations. Specifically, investing in technology and training for our advisors, broker-dealers, and wealth managers on using social media to better reach Main Street and clients.
Social media is a key way of driving transparency, empowering the public, and re-establishing trust. It can enhance how businesses reach their clients and give firms a personality.
How exactly? Here are 4 tried and true principles that existed well before Facebook, LinkedIn, Twitter, and Google+, but ring more true than ever in the social media era.
1. Be where your customers are
At a recent advisor conference I had the privilege to attend, it was highlighted that over 93% of US online adults who have a financial advisor have an active social media account. That’s not surprising since over 1.7 billion people now have a social network account on Facebook, LinkedIn, Twitter, or Google+. Social media (done compliantly) is an invaluable platform to engage with clients.
Not being on social media as an advisor, on the flip side, is like not showing up to the cocktail party that your clients attended: you’ll miss out on talking to them firsthand about their lives and interests. Put another way, could you imagine if 93% of your customers were distributing information via email, but you didn’t have an email address?
2. People buy from people, not corporations
Former Senator Judd Gregg, SIFMA’s CEO, at SIFMA Annual Meeting. See more highlights on SIFMA’s website: http://www.sifma.org/annual2013/
We’ve all heard this and, as consumers, we all know this. The same applies in the financial services world. In fact, it is actually more poignant to financial services institutions, whose brands have been tarnished by the financial crisis.
To address this, President Clinton said it best when he said trust is critical and must be rebuilt; in order to do this, he said that one has to “go local.” In the social media world, this means allowing advisors and agents to engage with their clients one-to-one over social media, as opposed to having a company page on Facebook and corporate Twitter handle that someone monitors. While required, that is not going to be the way to establish trust.
As E.F. Hutton said, this has to be done “one investor at a time,” and social media platforms like Hearsay Social enable advisors to do that compliantly and at scale.
3. Listen before you speak
In other words, “know your customer.” With over 1.7 billion people on social networks, including 98% of the US online population, there’s a wealth of information to be gained. Clients are sharing information at an increasing rate on social media that before would only surface during a face-to-face meeting. Life events like a new job, marriage, new baby, or a home purchase are all key “social signals” that can arm an advisor to better service clients and their needs.
4. Be human
In other words, be authentic, be cooperative, and be a resource. Social media allows everyone to have a voice, which can be an asset when done right but a liability when done wrong. People don’t want to be sold to on social networks. They want to hear from experts and engage with people who have interests similar to theirs, both personally and professionally.
Beginning with the end in mind, if the goal of the financial services industry is to help Main Street prosper and re-establish trust, enabling financial advisors and wealth managers to become trusted advisors means enabling them to be the credible experts they are. This requires listening (see #3 above) and then sharing information that clients find relevant, valuable, and timely. Over time, clients will view the advisor as a tremendous resource and someone who they trust and want to hear from on a regular basis both online and offline.
Social media enables advisors and their firms to educate the public in a transparent way, especially as trust and influence have decentralized from traditional institutions to individuals.
How Hearsay Social helps financial firms
Hearsay Social enables financial service firms and its employees to be compliant using social media across all devices, thereby meeting the supervision, monitoring, and record retention requirements defined by regulators such as FINRA and the SEC. In addition, by distilling social media posts and communications into relevant social signals important to a financial services professional, Hearsay Social enables financial advisors, wealth managers, and asset managers to engage the right people with the right message at the right time – a big step forward in delivering high quality service and becoming the much sought-after “trusted advisor.”
While social media is not the silver bullet to re-establish Main Street’s faith in Wall Street, it is a critical communication channel for a two-way dialogue and relationship-building that financial services firms, their leaders, and their advisors can no longer leave behind.