The Social Advisor: Using Social Media Effectively in Wealth Management -- Full Text

Eighty-seven percent of US adults with an investment account visit social networks regularly. Learn how wealth management firms can use social media to improve customer acquisition and retention.

Finding Diamonds in the Rough
In 2011, a Morgan Stanley Smith Barney advisor connected with a past acquaintance after viewing his profile in LinkedIn. After a subsequent phone call, the advisor secured a $2.6 million 401(K) roll-over account. The same advisor successfully used Twitter to start a relationship with an estate lawyer whom he had been pursuing for seven years. Shortly after connecting on Twitter, the lawyer referred a large estate planning case.

Are these the types of examples that an advisor should expect within minutes of joining a social network? Probably not; however, advisors are now able to use social networks to create additional touch points with clients and referral sources and when applied consistently (as they are in offline channels) social touch points become part of the whole customer experience.¹

Overview
Over the course of 2011, U.S. and Canadian regulatory bodies such as FINRA and IIROC began opening the regulatory gates for financial advisors to communicate on social networks.² With some guidance provided, firms such as Morgan Stanley Smith Barney, LPL Financial, New York Life, and Raymond James all launched pilots to test the waters for customer acquisition and relationship building.

Today, these firms, and those in similar positions, are exploring how to scale social tools across front lines and move beyond their pilots. However, this is not easily done. It takes time to work social networks into existing channels and it is very much a new competence that sales and marketing executives will need to master.

IT, legal, and risk executives must also be involved, with responsibility for new technologies and new compliance and risk concerns. All of this leads to the emergence of a new or modified operating model for a socially infused distribution channel.

In this brief paper, Accenture will discuss a holistic approach for adding social media to advisor and agent channels and how this affects different areas within an organization. We will also share the change management challenges firms face with social media at the advisor level and ways to address them. Along the way we will provide insight into factors for success and why technology platforms are only part of the solution.

At the Intersection of Advisors and Social Networks
In the future, the daily life of advisors will still revolve around many of today's rituals, such as call planning, preparing for client and prospect meetings and building relationships. Advisors will still be measured on today’s primary goals: growth in assets under management and new relationships developed.

However, social networking will become increasingly important in this pursuit. For example, an advisor might review a client’s updates and posts from Facebook, LinkedIn, or Twitter prior to a client meeting.³ This information might provide insights into changes in lifestyles, major milestones, or more plainly, common interests. This could help tailor the next interaction with a client or prospect, especially when matched with existing information held by the firm.

This may also help clients and prospects learn more about their advisors and those they trust for financial guidance (see Finding Diamonds in the Rough sidebar for real world examples). Furthermore, firms might use software to detect when information posted on a social network warrants an action by the firm, such as a sales call, addressing a customer service issue, or dealing with a specific complaint. A recommended action could then be pushed to an advisor for consideration along with suggested content.

Scenarios like this are becoming more common. In fact, 87 percent of US adults with an investment account visit social networks regularly and over 50 percent of those 55-65 visit at least monthly if not more frequently.⁴ Furthermore, these same investors are more willing to use a mix of advice and self-direction when making investment decisions.

Understanding the Obstacles
2012 will be remembered as an interesting year for wealth management and social media. These two points suggest that today’s wealth management advisors need to be increasingly in front of their customers with both standard touch points and the new touch points that can be leveraged from social networks.

More advisors and firms will seek social networking tools; new advisors will bring their social networking preferences to the industry; and regulation will continue to evolve. However, despite these changes, serious challenges still exist. For starters, advisors currently using social networks are less confident in their use of social networking compared to a year ago as it relates to driving business.⁵ In addition, social networks present the following obstacles at the advisor and firm level:

• With more advisors using social tools, the uniqueness of being on a social network is waning.
  
  
• The ability to differentiate through content is proving to be a challenge that many firms and advisors must address more aggressively.
  
  
• There must be processes, procedures, training and technology in place for an advisor or representative to post an update to a social network and stay within compliance guidelines. This is by no means a small challenge.
  
  
• Adding social networking tools to a wealth management firm’s channels is not free—it requires social media management software, archiving and storage space, content partners, training curriculums, regulatory upkeep, and dedicated resources to manage the communication. Firms need to determine what costs are part of doing business and what costs are pushed into the channel.
  
  
• Many firms (regardless of industry) struggle with tracking return on investment and attributing social media efforts to business outcomes. So with a long list of challenges, where do firms go from here?
  
  

Increasing the Chances for Success
Early experimenters such as Morgan Stanley and LPL Financial understand many of these challenges and are taking calculated steps to train, enable, and support their advisor channels.⁶ While these firms might take different paths to achieve success at scale, we believe all firms should base their efforts on these key principles:

• Customer Experience Strategy Comes First: Firms need to understand how new touch points and information from social networks affect the desired customer experience and how social networks influence the customer journey. With that understanding, firms can better decide how to employ tools and techniques that support a customer experience strategy⁷ versus only a social media strategy. Firms that don’t have a sound customer experience strategy should develop such a strategy before tackling a social media strategy.
  
  
• Social Media Requires an Architecture, Not a Software Solution: There is no doubt that technology solutions need to be employed in the process of enabling advisors to use social media. Existing technology such as CRM systems and analytics capabilities will need some tuning. New technologies like social media monitoring⁸ will need to be considered along with social media management platforms such as Hearsay Social, Socialware and Actiance.⁹
  
  These new and existing platforms need to work harmoniously with each other and in connection with a broader technology architecture encompassing security, enterprise single sign-on and other elements.
  
  
• New Processes and Procedures Are Needed: Allowing advisors to use social media requires new guidelines and procedures. These include processes for the creation of new content, moderating dialogue and managing compliance and risk. This creates new process flows, social media policies and a detailed mapping of activities around social interactions.
  
  Firms should also focus on continuous improvement along with the right change management steps to reach desired levels of maturity. Otherwise, the support staff and process to enable social media (content creators, content approvers, legal reviewers, etc.) will quickly grow unwieldy and not scale with the business.
  
  Finally, firms must think about how to integrate social media efforts into other parts of the firm already using social channels—enterprise social listening teams, social marketing initiatives and more.
  
  

• Provide Initial and Ongoing Education: Although firms may have learned how to communicate with customers and prospects, they must now incorporate social channels. Education includes understanding new risks, learning how to use new tools, understanding new processes for content development and practical guides for operating within social networks.
  
  Firms also need to consider that education is an evolution. Initial education should focus on satisfying FINRA requirements and helping advisors get started. Ongoing training should focus on honing competencies, while staying up to date on emerging trends.
  
  Finally, education should be socially infused, meaning that firms should consider the use of internal social networking techniques in training and skills development.
  
  
• Content Is Still King: Content needs to not only reflect the voice of the firm, but the character of the advisor and the person they are communicating with. Firms need to develop content themes, content style and specific content supporting specific outcomes. Content must also serve multiple purposes.
  
  In some cases, content may be a pre-approved general update, while, in other cases, it may consist of simple guidelines for communicating within compliance rules. In all cases, the development and delivery of relevant content will be a key to long-term success and differentiation.
  
  Firms need to cultivate new sources of content and help advisors understand how to develop original content that is not only effective, but in the style of the brand. This will be a challenge for many firms to overcome.
  
  
• Analytics and Data Integration Are Fundamental: Analytics will be the key to maximizing the return on investment from enabling advisors. With proper data collected and then distributed across applications, firms can begin attributing social interactions to business outcomes. Data can also be used to continuously tailor interactions, provide insights into content effectiveness and create new insights about customers, products and markets.
  
  As firms mature, data-driven models can predict the right balance of personal versus business content, along with ideal times for content delivery. Predictive modeling can also identify which social behaviors, when combined with customer data, indicate a specific action or likely outcome. To do this effectively and tap into the true potential of a socially enabled channel, firms need to think about data integration and analytics from the outset.
  
  

With both challenges and opportunities measured, wealth management firms can begin to move forward. Social media is not a silver bullet, but it does create new opportunities. One effective approach for priming the channel is to use internal collaboration programs to support the roll-out of external social media. Internal collaboration, also referred to as social or enterprise collaboration, makes use of technology platforms to connect employees with each other to work together on projects, initiatives, and shared interests (think Facebook for the firm).¹⁰

Internal collaboration networks allow advisors and support personnel to try social networking tools and techniques, get acquainted with similar technologies and gain confidence inside of the firm prior to trying it in the real world. Social collaboration can also provide direct support to initial pilots and demonstrate how they expand and sustain overtime.

Summary
In 2012, most firms will continue the process of incorporating social media into their marketing and sales channels while dealing with a variety of issues and challenges. Leaders will focus on the customer journey and how social networking is becoming part of the advisor and client DNA rather than a challenge to the existing order. Success will hinge on the development of a skill set that helps advisors be more effective in their daily routines and more relevant to generations seeking multichannel interaction.

Finally, executives in charge of customer experience, sales and marketing need to give themselves plenty of runway for social media to take off. Social media is a new capability, not a new technology or channel, which should, ideally, support and complement existing marketing and distribution initiatives.

Endnotes
1 "For this Financial Advisor, Tweets are Good for Business," Jennifer Hoyt Cummings, The Wall Street Journal, December 2011.

2 FIRNA (www.finra.org) Notice 10-06 and 11-39 and IRROC (www.iiroc.ca) Notice 0349

3 Facebook, LinkedIn and Twitter are just the tip of the sphere. Other interactions that may become part of an individual’s online profile also include places like Seeking Alpha, StockTwits, Wall Street Journal Online, etc.

4 ”Case Study: Vanguard Uses Social Media to Learn From Its Clients.” Bill Doyle, Forrester Research, February 2012

5 "Financial Advisors' Use of Social Media 2011," Ron Shelvin, The Aite Group. In this report, Aite group shows a decline in perceived benefits of social media from 2009 to 2011 from the perspective of a financial advisor.

6 Morgan Stanley Smith Barney discussing their plan for advisor use of social media on Socialware.com (http://www1.socialware.com/Morgan-Stanley-Smith-Barney-Social-Media-Plan.html). “LPL latest to deploy social-media archiving system” Davis Janowski, Investment News, June 2011.

7 Customer experience strategy is the resource and activity plan that determines the experiences that customers ultimately have. It is typically a sum of interactions across media channels, product or service experience, and any interactions with representatives of a brand.

8 Social media monitoring is a combination of technology and process to aggregate and analyze content from social networks, blogs, news outlets, ratings and reviews, and other places where content can be tracked and analyzed. Brands can use social media monitoring to assess how their brand or product is being talked about, by whom, and the relative degree of volume associated with brand mentions.

9 The vendor landscape for compliance-based social media management platforms is still emerging. Today’s vendors include Hearsay Social, Socialware, Actiance, Erado, Engage121, SunGard, and more. These platforms provide tools and software for compliantly posting content, blocking social network features for compliance, archiving posts, and reporting on activity within social networks.

10 Several technology platforms are available to support social or enterprise collaboration. These include Jive Software, Microsoft SharePoint, Lithium Technologies, Salesforce, and Telligent.

Authors
Mark Newcomer is a digital strategy architect focusing on digital marketing and social media for Financial Services.

Jason Breed leads Accenture’s Social Media group with more than nine years of experience in developing and implementing advanced social media strategies across Web (online) and mobile with significant, demonstrated ROI.