Recently, we were excited to participate in SIFMA’s Social Media Seminar in our hometown of San Francisco. The event brought together industry leaders to discuss the rapidly evolving role social media is playing in financial services, share best practices for driving brand awareness, and provide practical advice on compliance and legal issues.
For those of you who weren’t able to attend, here are the best takeaways we heard at the event.
The Next Digital Frontier for Financial Services
Hearsay Social CEO Clara Shih presented the event’s keynote where she described how firms could use the power of social media to amplify their brands and grow business. Specifically, she focused on key challenges and opportunities the industry faces in 2014.
- Changing Customer Expectations: The rise of the digital age has fundamentally changed how consumers interact with brands, request customer support and make purchasing decisions.
- Aging Advisor Population:As the age of an average advisor increases, firms are struggling to replace them fast enough. “Subsequently, the number of advisors in the workforce has fallen to record lows,” said Clara.
- Broken Distribution Model: Digital is emerging as a sales channel, but it works best for selling simple products that are based on price consideration, not complex products that require advice and explanation.
Clara presenting at #SIFMASocial
“Now, more than ever, financial services firms are in the trust and relationship business,” Clara explained. “The role of social media is not about replacing advisors, it’s about enhancing their abilities, making them superhuman … by enabling them to quickly and easily find information about their clients and prospects.”
Increasingly, consumers are going online to research and validate purchasing decisions. Social media provides a unique way for producers to get insight into the needs and interests of their clients and prospects. “Advisors who know about three money-in-motion life events—such as career changes, marriages and births—see on average a 10% gain in productivity,” she said. “It’s time for producers to take those online conversations offline to provide the most value to their clients.”
Additionally, social media can help firms attract and retain the next generation of talent. “Millennials don’t want to cold call… Empower your younger advisors to use the tools they are most familiar with,” she said.
In closing, Clara spoke about the future of social business in enterprise organizations. “Social media initiatives have moved from a siloed side-project in marketing to an executive and board level priority. It’s time to take social business from optional to a must have.”
A Conversation with Leaders of Social
The next session featured a panel discussion with Jennifer Grazel (Global Head of Category Development, Financial Services, LinkedIn), Dan Greenberg (Account Manager, Financial Services, Twitter), Keith Watts (Financial Services Business Lead, Facebook), and moderator Mimi Bloom (Director, Digital and Social Channels, Charles Schwab & Company, Inc.). The participants discussed the current thinking and best practices for social media that the top social networks have observed from their financial services clients.
- “Financial services firms are rebuilding consumer trust through the use of social media,” said Dan. “Consumers have a predisposition to make certain decisions. We see that they use social media to validate those decisions by getting feedback from their connections and to discover other service providers.”
- “If content is currency, then context is queen” explained Jennifer. “When you’re creating content, ask yourselves how it drives utility and is relevant to your audience—what’s in it for them.”
- The tone used for content is crucial. “The most effective work we see financial services firms doing is more personal and authentic,” said Keith. “Talk more to the emotional value you bring to people’s lives. “
Mobile device usage is also changing the way users consume social media. Content should be optimized for small screens and be visually appealing. “We’re seeing a real shift towards visual and rich media,” said Dan. “Easily consumable content, such as videos and infographics, works well.”
From left to right: Keith Watts, Dan Greenberg, Jennifer Grazel, and Mimi Bloom
Firms can amplify their brand and messaging by enabling their employees to participate in social conversations. “Your employees have a huge impact on extending your reach,” said Jennifer. “Social media is a magnifying force,” agreed Dan. “Tie your social programs to your overall media plan to get the most insight into your follower metrics.”
But regardless of the content firms produce, it’s only valuable if it has an audience. “Social is a medium that let’s you tell your story in an authentic way,” said Keith. “But you have to find your audience.” Promotions may help make content top-of-mind, but “good organic content” is needed to make those initiatives worthwhile.
The session ended with a lightning round where Mimi asked the panelists about the biggest social media challenges financial services will face this year. Two factors stood out. First was the ability for organizations to establish a social business culture. Referencing Clara’s earlier presentation, Dan commented that, “your social programs need to be driven from the top down—exec involvement is a critical factor for success.” Keith agreed, saying firms needed “the adequate resources to do social correctly.” Additionally, firms need to work on driving the value of social media further down the sales funnel. “Right now, social is a driver in getting consumers’ attention,” said Keith. “But we know there’s value in driving long-term customer engagement and satisfaction.”
Navigating the Web of Social Media Regulation
This highly anticipated session featured compliance guidance from speakers Thomas Selman (Executive Vice President, Regulatory Policy, FINRA), Mitchell Bompey (Managing Director, Legal and Compliance Division, Morgan Stanley), Douglas Preston (Senior Vice President and Compliance Executive, Bank of America-Merrill Lynch), and moderator Barbara Stettner (Partner, Allen & Overy).
Today, clients can potentially endorse or recommend an advisor effortlessly through their social media channels. And this has been a great concern for regulatory bodies. The SEC is expected to release formal guidelines later this year advising firms how they can avoid adoption and entanglement issues related to endorsements and ‘likes.’ Until then, the panelists explained, firms must rely on current guidance from FINRA and other regulators. At a minimum, they recommended that firms prohibit their producers from enabling the ‘Endorsements’ feature on LinkedIn, and monitor archive Facebook ‘likes.’ Firms were also recommended to add a prominently placed disclaimer on advisors’ social media profiles stating that neither they nor the firm encouraged third-parties to post content and are not responsible for the accuracy of such content.
A Deep Dive into Social Media Strategies for Financial
Later in the afternoon, a panel of advisors described how they use social media to connect with clients and prospects. Panelists included Karen Kehr (Financial Advisor, Ameriprise Financial, Inc.), David Amann (Financial Advisor, Edward Jones), Lynn Ballou (Managing Partner, Ballou Plum Wealth Advisors, LLC and Registered Principal, LPL Financial), Scott Poore (Financial Advisor and Director of Investment Solutions, Wunderlich Securities, Inc.) and moderator Wesley R. Long (Executive Vice President, Head of Private Client Securities Group, Wedbush Securities).
The panelist reported that LinkedIn was the network they most often used for business, but Facebook was a great way to let their clients know more about them. “I typically update my Facebook page two or three times a week,” said Karen. “I publish more content on LinkedIn because my clients are more comfortable getting messages there, but Facebook is great for sharing pictures and other fun information.”
Authenticity and relevancy are key to engaging with clients and prospects. “The posts that have done best [for us] are those that resonate with our clients,” said Scott. “Before I post, I ask myself ‘Is this content timely? Is it relevant to my clients … Does it help my team be more productive?’” When asked why they started using social media, most said traditional marketing methods were ineffective. “Reaching out to clients by phone is dead,” said Scott. “But 60% of the clients I contact through LinkedIn InMail reply back. It’s a great way to [set up] follow up appointments.” Lynn added, “We started by blogging. At first it wasn’t specifically focused on business, but our clients started sharing it on social and we began reaching out to them there, too.”
For the final question of the session, Wesley asked each panelist what was the biggest benefit they got out of social media. Lynn’s answer summed up their responses. “It helps us set up more meetings, and makes client follow-up more routine and efficient.”
No longer optional
By the end of the day, it was clear that social media is no longer optional for financial services firms. As a key business initiative, driven from the top down, social business is providing firms an indispensable business advantage.