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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 RoughIn 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
OverviewOver 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 NetworksIn 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 Obstacles2012 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:
Increasing the Chances for SuccessEarly 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:
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.
SummaryIn 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.
Endnotes1 "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.
AuthorsMark 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.
April 18, 2012
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