When it comes to social media, it is no longer enough simply to show up..... “Perhaps six months ago, [an adviser] could have established a competitive advantage by simply being on social media,” said Clara Shih, founder and chief executive of Hearsay Social Inc.
“But everyone is there now, to some extent, so advisers have to find a way to differentiate themselves — to come up with some sort of customized services for their clients, in order to stand out.”
Hearsay is one of a growing number of vendors that provide enterprise-level social-media-marketing management to big firms in the financial services industry, from brokerages to insurance companies.
For example, Farmers Insurance Group of Companies uses its services not only to manage multiple corporate brand pages, but also the pages of more than 5,000 local insurance agents.
GREAT EXPECTATIONS
Chad Bockius, chief executive of Socialware, another provider of social-media-management-platform services, has a similar view.
“There is an expectation that you will be on social media, and if you are not, that says something about you, too,” he said. “If I am a client and use it and you are not on it, [you are] in the Stone Age,” he said. “It is not about social business — it is about business.”
Now that everyone, or almost everyone, has a social-media presence, the conversation is moving to how best to utilize it to enhance and increase business.
Socialware, for example, has collected LinkedIn usage data showing that the highest amount of traffic occurs around 8 a.m. The bulk of the users visiting LinkedIn at that time are using office desktop computers.
Another big blip of LinkedIn visits occurs at bedtime. This time, though, those being tracked by Socialware are accessing the site not from a PC but from a dedicated application on a tablet or smart phone.
These are the sort of subtle observations that will help social-media winners create the most appealing content in the future.
Other firms are noticing patterns, too.
“What has been interesting is the ability we now have to start seeing trends in the data,” said Sarah Carter, general manager for social business at Actiance Inc., another large provider of social-media archiving, management and — with the release last year of its latest product, Engage — analytics.
“We noticed that Friday is when people want to engage with financial professionals, while Monday is just the worst day of the week for it,” she said.
Wednesday appears to be the second best day of the week. By extrapolation, Ms. Carter said that advisers can start making the most of their efforts with social media on the appropriate days and concentrate on other activities the rest of the time.
Gone though, are the halcyon days where marketing mavens, and even some advisers, thought that social media represented some sort of magic bullet for prospecting — a modern technological replacement for the breakfast seminar and old-style referrals.
David Edwards, president of Heron Financial Group LLC, probably is emblematic of how advisers can best hope to use social media.
“It is not just one little thing or one use — say, direct prospecting. Rather, it is a force multiplier,” he said, borrowing the popular military jargon and explaining that social media not only has to be used to increase traffic to an adviser's website and social-media pages, but also has to mesh neatly into an overall marketing effort.
Planning that strategy out in a holistic sense, as one would a client's asset allocation, is critical, Mr. Edwards said, even if it requires hiring a coach (as he did) or social-media consultant.
He has gone so far as to hire a summer intern to convert high school and college alums into connections and even converted two of them into clients. That moderately successful effort is not the end-game, though.
For personal matters, Mr. Edwards established an account on Facebook to keep all his friends up-to-date. But he also has set up a fan page for his advisory work, which he keeps separate from (although tied to) his personal account.
He learned to cross-link sites so that each bit of news or commentary he launches on Facebook also makes its way to his status update on LinkedIn and launches a tweet on Twitter.
While Mr. Edwards' current average client is in the 55-to-70 age range and has between $550,000 and $10 million in investible assets, he has an eye on a younger, more web-savvy demographic in the 35-to-55 range, an age category he thinks is more responsive to online efforts. (Research bears this out.)
SHARING OPINIONS
And with that impetus, he has expanded his efforts to something else he enjoys, sharing his opinions on the markets through regular Bloomberg Radio spots and sharing expertise in influential publications online.
Search engine optimization was not left out of the equation, either, and thanks to outside help, Mr. Edwards' firm now appears on the first page of Google searches for “wealth adviser” and “New York.”
Another example of a minor accomplishment was his recent success in landing a client who had heard him speak online, sought him out through a search and got in touch.
“If you do not fully embrace it, social media is just going to be a distraction,” Mr. Edwards said.
In an InvestmentNews survey conducted in May, about three-quarters of the advisers who participated said they are now using social media.
Almost a quarter use social media to find new clients, but only 15% said that they have successfully attracted them through their online efforts.
Among those advisers who have gained new clients from using social media, LinkedIn was the most frequently used network, followed by Facebook.
PERSONAL VS. PROFESSIONAL
Data collected in a similar survey conducted by FTI Consulting Inc. and LinkedIn back up those findings.
While significant numbers of advisers maintain a professional presence on Facebook, it is widely considered to be more of a personal network than LinkedIn. FTI managing director Neil Benedict said that trying to understand why that might be is fairly intuitive.
“The way LinkedIn works is that it is very supportive of the way that advisers interact with clients. It is a very efficient channel,” Mr. Benedict said.
“We really saw that their traditional way of doing business and how they normally achieve new clients is really parallel [to how LinkedIn works],” said LinkedIn researcher Emily Friedman.
The wirehouses also are dipping their toes into social media, perhaps none more so than Morgan Stanley Smith Barney LLC.
“Having fluid, real-time commentary and compliant communication is priceless, in my opinion,” said Mark Scribner, a wealth adviser in MSSB's Global Wealth Management division.
“It's more like a collective gentle reminder that we are top of mind,” he said, “Often, a post will generate a question or deep conversation about the impact it may or may not have with our client, which we feel is critical,” Mr. Scribner said.
He went on to describe how MSSB has published a large amount of educational information on fixed income, and that over time, clients and prospects who have read the material have come to realize that MSSB offers services of which they were unaware.
Investors' preference for more-professional content is backed up by analysis of data at Actiance, where content created by analysts or experts at headquarters and pre-approved for use by advisers has been found to be three and a half times more successful than content created by advisers themselves.
In other words, click-through rates, time spent with the content, re-tweets and other measures show it to be more popular among clients and prospects.
“My theory is that it seems to be more professionally written,” said Actiance's Ms. Carter, and thereby deemed more credible.
The most efficient channel for many advisers to share such data is Twitter, though not all are allowed to use it yet.
Professor Michael Finke of the Department of Personal Financial Planning at Texas Tech University, along with his co-author, graduate assistant Tao Guo, have been analyzing a one-million-tweet data set provided to them by the popular social-media-archiving provider Arkovi.
They found a significant correlation between tweets by financial advisers and the ups and downs of the S&P 500.
In a nutshell, advisers send out significantly more tweets when the S&P dips in value by at least 2%, versus when it gains ground.
While it might not be profound, it is one example of how Twitter, in particular, is being used for more than just prospecting; in this case, for real-time client communication.
“What we have here is evidence of instantaneous communication between advisers and their clients over the medium,” said Mr. Finke.
As he went on to explain, one of the most harmful behaviors exhibited by investors, as established in many other studies over the years, is their poor timing when it comes to selling equities in their portfolios.
“They tend to be loss-averse, and one thing an adviser can do is talk the investor down,” he said. “Establishing a trust relationship with clients through social media without having to make phone calls could end up being one of the simple but powerful ways an adviser can leverage the channel.”
An often-underrated way for advisers to use social media is simply listening or reading the content of others, including clients.
“One of the greatest successes we have seen is active listening to what their followers and connections are doing,” Ms. Carter said.
“Stop thinking of it as mainly a broadcast tool, but monitor it for what others are saying,” she said. “People share a lot more on social media than [what you find out] when you cold-call them.”
djanowski@investmentnews.com
