Many financial advisors remain understandably leery about using social media especially in the face of regulatory compliance. However, they may be losing out on opportunities. According to the Cogent’s research report, “Social Media’s Impact on Personal Finance and Investing,” one-third of affluent investors use social media, including Facebook, LinkedIn, Twitter, YouTube and blogs.
Time to Change Opinion on Social Media?
Furthermore, the report states that nearly 70 percent of investors have reallocated investments, or started or change relationships with advisors based on content found through social media. And FINRA has issued several notices clarifying the rules for advisers using social media. Advisors will be hard-pressed to find reasons not to investigate social media. Don’t know where to start? Begin with Three social media guidelines for financial advisors.
One of the more important factors is the ability to archive all online conversations. Social media management firms, social CRM and message archiving technology from the following companies will help advisors satisfy the requirement. This isn’t an exhaustive list, but one to give you an idea of what’s out there.
Actiance’s compliance management platform helps manage organization’s real-time communication, collaboration and social networking to ensure they meet regulatory requirements. Actiance includes audit trails, real-time content review and secure archiving for all communications channels.
RegEd Arkovi Social Media Archiving platform archives email, social media communications and YouTube, including profiles, company pages, comments by everyone — not just the employees, likes and so on. RegEd supports Google Apps, Office 365 and offers on-demand audit reports and search exports. The company also has various compliance and risk management tools and training.
Designed for FINRA and SEC compliance among others, Erado’s suite of products review content in real time and near time, and capture, archive, secure and encrypt electronic communications, such as email, social media activities and instant messaging. The company also helps with developing a corporate compliance policy and provides disaster recovery services.
Hearsay Social Compliance Solution captures and archives all social communications across devices, locations and access points. The platform continuously monitors all content in real-time for instant remediation. Hearsay’s dashboard consists of pre-approval workflow, real-time alerts, supervision and approval trails and infraction resolution.
Smarsh hosted email archiving and compliance platform captures and archives every email and internal message, and includes search, supervision and on-demand export features. Smarsh’s Virtual Compliance Officer for electronic message supervision activities is integrated with the company’s hosted message archiving platform. This tool searches all communications and takes action based on customized policies.
Socialware software and services helps organizations use social media securely and stay within compliance on the corporate network and mobile devices. Socialware Compliance lets organizations define and automate social media compliance policies and create workflows and processes.
Before You Invest in Social Media Tools …
Most of these companies state that technology also needs people, processes, policies and strategies. Organizations can’t rely on technology alone for complying with regulation requirements and benefiting from social media and other communications. Any company that says otherwise is probably one to avoid.
Social media has one advantage over other modes of communication: online technology. Because of this, everything said and done in social media is stored. This makes the data searchable, trackable and reportable. Again, technology doesn’t cover everything. Financial advisors need to be educated and incorporate social media strategy into the business strategy.
Today’s guest post comes from Nathaniel Mollen, a student of philosophy at Ursinus College. Marketing is only a little like metaphysics, but it’s made him somewhat of an expert in making dry topics both clear and interesting.
Lead nurturing is not really a new idea, but the term “lead nurturing,” and its codification as a strategy for using email to improve lead quality by relationship building only came into its own in the 2000s with Microsoft and the like paving the way. The fact that it took almost seven years after email became a widely used form of mass communication for marketing people to realize the potential of using it in this way may be a lesson for the industry. As the very premises of how people do business change at an incredibly rapid rate, it pays to be as on-the-ball as possible with new trends in how people communicate.
This is why online lead nurturing – lead nurturing that takes advantage of social media – is incredibly important. Current doctrine seems to dictate that all email-based lead nurturing campaigns include links to social networking sites like Facebook, but there’s very little in the way of advice on using the social networking sites themselves for nurturing, since getting a lead to follow you online through email is already a double opt-in – a high quality lead already.
But maybe that’s not enough anymore. Maybe doing the lead nurturing online entirely is the way of the future. Email is seeming less efficient by the day, and adapting existing lead nurturing doctrine to work with social networking seems like a very smart thing to do. Unfortunately, the groundwork for doing this easily – much less in a way optimized for the medium – just isn’t there yet. Because the most obvious features of social networking is its ability to share, most marketers consider the options it presents only for lead generation. But by ignoring the things it brings to the table in terms of accessibility and personalization – the more conversational nature inherent to the medium – you’d be remiss to not consider it. After all, a lead who has followed your page has already expressed an interest in knowing more (doubly so if inbound from a hub like LinkedIn).
So how do you adapt to this new way of communicating?
One begins by understanding that online lead nurturing has to play by the medium’s rules. Social networking posts are almost always necessarily shorter than would be otherwise ideal for an email update. In this not-quite-so-new-anymore age of Facebook, LinkedIn, Google Plus, and Twitter, things are much more high-key, and information goes by a lot faster. It’s the compression and information density that so many sociologists love to critique, but love it or hate it, it’s your marketplace now, and it must be understood.
So the first thing you’re going to have to consider is the rate at which you update. Posts being shorter means that you’re either going to have to compress the amount of information you’re passing at any given time (and risk coming off as too stiff – the point of this is, after all, relationship building) or repackage it into smaller pieces. If you’re doing it in smaller pieces, then the rate at which you send those updates out must also be more rapid. More frequent updates also compensate for the high-key nature of social networking by helping ensure your leads maintain their interest. Naturally, this must be balanced so as to not annoy or buffalo your leads such that they are lost.
This effect is especially pronounced on sites like Twitter, which have set character limits. If you’re including links in your updates, that only compounds the problem. How do you communicate anything effectively to your leads? This is the persistent problem Twitter has in general with attracting new users: the perception that 140 characters can’t possibly hold anything of value.
The trick with Twitter is in not thinking of individual tweets as online lead nurturing updates. Tweets are best send out in bursts which together form a whole. If lead nurturing is fitting together pieces of a puzzle, then online lead nurturing with twitter is like building the puzzle pieces themselves out of Lego. It’s not such a hard thing to consider when you remember that the optimum length in characters for an email heading is about the average length of a tweet, so if you have experience with that, you likely already have the necessary skills for making it work.
The most important thing to consider, however, is the dynamic nature of social networking. Email campaigns are largely impersonal, because they have to be. Making an actual connection with each of your possibly hundreds of leads by email is generally too work intensive to be practical. To be practical, most email lead nurturing campaigns have to be largely automated and static.
On the other hand, the dynamics of social media mean that actively interacting with your leads – making them fans by outreach – is suddenly practical. Not only can you readily like and reply to their comments, you can also share or retweet your leads’ content in return. In other words, there are many more opportunities to make your online lead nurturing more about the lead and less about the pure mechanical automation of releasing product or service info. As lead nurturing – online or not – is absolutely reliant on establishing and maintaining this relationship, this makes social networking potentially invaluable. After all, who among you would remain friends with someone who’s always speaking and never listening?
Naturally, as comparatively new ground, this sort of online lead nurturing can run into unfamiliar difficulties – like the danger of making yourself too available – but it’s a potentially powerful and very much cost and time effective tool to have. And when you’re a startup business with no time or money to waste, it’s things like this which can mean the difference between breaking even and being forced to abandon years of work.
Good luck, and happy marketing!
Although many financial advisors would like to get out there in social media, they’ve been cautious and with good reason. A July 2013 SEI poll of 200 advisors has found less than a third of respondents use social media. They’re concerned about broker dealers, regulatory compliance, time and cost, archiving of social media activities and coming up with content.
Yet they know the value of social media for building relationships with clients and industry thought leaders, communicating with investors, reducing marketing costs and increasing sales. A lot has changed as regulatory organizations have issued guidelines to help financial advisors jump in the tricky waters of social media without going out of bounds.
Social Media Regulations for Financial Services
FINRA (Financial Industry Regulatory Authority) has issued Regulatory Notice 10-06, Guidance on Blog and Social Networking Web Sites. It has also issued Regulatory Notice 11-39, Guidance on Social Networking Websites and Business Communications to cover the questions not addressed in 10-06. Those two FINRA notices and FINRA Rule 2210 especially 2210(c)(6), which addresses the spot-checking of social media communications help financial services firms ensure they comply with FINRA regulations.
SEC’s 2008 Guidance on the Use of Company Web Sites also applies to social media. What’s more is that the SEC embraces social media. The SEC states firms can use social media as long as they make their social media plans clear to investors and that they don’t share information that would give any investor an unfair advantage.
Just like firms must adhere to fair-disclosure rule in all communications, it also applies to social media. Still after reading these guidelines, financial advisors may be throwing up their arms in frustration not knowing where to begin.
Start with three simple steps: Create a social media policy, undergo training and archive all online activities.
1. Create a living social media policy.
Since social media continuously develops, this living document needs to evolve with it and adapt to regulation and technology changes. A social media policy identifies the financial service firm’s goals for using social media, policies and procedures for using social media, outlines who can represent the firm in social media and lists the social media platforms supported and how each is used.
Review and address all of the points in aforementioned guidelines in the social media policy. It’s important to keep revisiting the policy as you would a business plan. As a financial services firm gains experience in using social media, it can revise the policy based on best practices and lessons learned.
2. Receive social media training.
This isn’t a one-time deal. Just like doctors and teachers undergo specialized training to keep up their knowledge and skills, financial advisors need to undergo social media training that covers the latest regulations, what content they can and can’t share online, the firm’s policy and social media best practices.
3. Archive all social media content and activities.
Archiving is a FINRA requirement and the firm needs to create a process for archiving all online content before communicating online. Archives include social media URLs, posts and updates. It also helps to have time-stamped entries for easier archive searches.
With the available social media guidelines and resources, financial services firms need not be afraid to connect with the big world of social media where many clients, investors and prospects await.
FINRA Targeted Examination Letters – Re: Spot-Check of Social Media Communications: http://www.finra.org/Industry/Regulation/Guidance/TargetedExaminationLetters/P282569
National Examination Risk Alert: Investment Adviser Use of Social Media: http://www.sec.gov/about/offices/ocie/riskalert-socialmedia.pdf [PDF]
SEC Says Social Media OK for Company Announcements if Investors Are Alerted: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171513574#.UhTmY6zhJgc
SEC Issues Guidance Update on Social Media Filings by Investment Companies: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171513280#.UhTmZazhJgc
Investing in a startup is an exciting adventure because you get in the game early before any of the players become stars. And when they start winning games, you feel a thrill knowing you were there at the beginning. Although it’s a risky investment, you miss 100% of the shots you don’t take. However, you can improve the shot percentage by doing due diligence using social media.
Before social media, investors relied on search engines for due diligence. They’d visit the startup’s website, read anything mentioning the company, and study the management team’s bios. The downside of this approach is that there may not be much information available and much of it comes from the company, which will be biased.
Finding common connections
With social media, you listen to conversations. You get a feel for the startup’s customer service and personality based on how they respond to social media comments. You also see the other side: comments from the people talking about the company. Social media give you more than the play-by-play of what’s happening in the startup. It can connect you with common contacts. For example, you don’t know the CEO of the startup so you can go to LinkedIn to see if you and the CEO have people in common. If you can’t find a close enough connection, perhaps you share one with another employee from the startup.
In researching the connections you have with the startup, you might find others of interest even if they’re not someone you know. The startup could be associated with investors, partners, industry experts and other people you may know about. Those connections can give you an idea of the startup’s reach and respectability.
Studying social media use
When you study the startup in social media, ask yourself the following. How does the startup use social media? Does the startup have its own Facebook, Google+, LinkedIn, Twitter, Instagram, Pinterest or other social media pages? How often does it update its pages? What does it share? Who is sharing? Are people interacting with the startup? What do followers say?
Check the startup’s followers. Are they customers, bloggers, competitors, industry experts, employees?Try to determine why these people chose to follow the startup. What impression do you get from reviewing the startup’s social media activity?
Is it getting traction and building support through social media? What are the general impressions people have about the company? Excited? Interested? Complaints?
If you find third-party mentions of the startup, review those. What are they saying? Who is saying it? Is it positive? Is it a reliable and trusted source?
Other than people deleting their own comments, no one can edit social media. Its fast-paced, conversational and spontaneous environment compels companies and people to reveal their personalities and thought processes. Just like statistics helped the Oakland A’s become a winning team as revealed in “Money Ball,” social media can provide investors with insights into a startup not available elsewhere.
What other ways can investors do due diligence on a startup?
Many business managers have heard of social monitoring but think it is costly, complex, and require you hire specialists. These are all false. There are social monitoring systems which allow you to quickly monitor your company, your products and your competitors. AND they are free and easy to use.
There are conversations occurring about you on many different types of social sites. While most managers are aware of Facebook, Twitter, and LinkedIn, significant conversations can happen on blogs, forum boards, video and social aggregator sites [like YouTube or Reddit] and on social news sites. Here are 3 you should use:
- SocialMention.com – Social mention is a great, free tool. Simply put in your company or product name and it will show you who is talking about you. It uses sentiment analysis to tell you whether their conversations are positive or negative, the strength of these conversations and much more. The site is totally interactive [want to look at the positive comments? Just click on them] and allows you to output key hash tags [twitter] and other information to your excel spreadsheets. This lets you compare chatter about your company and your competition. See the Sentiment ratio? If it goes negative…you are in big trouble!
- AllTop.com – Alltop lets you monitor who is influential by topics of interest to you and your company. Simply put in the topic and it will give you the sites & groups most influential in the conversation. A great way to find compelling content for your site or to link up with experts in different areas.
- Listorious.com – For any topic, there are bloggers and experts who are at the core of the conversation. Listorious lets you see who is most influential in your specialty areas. Want to go viral? You need to talk to these people.
We recommend our clients use these tools every week to find out what is happening in social media. They are a great way to learn what is being said about you and your competition so you can manage – rather than just react – to social commentary.
Randy Hlavac is CEO and founder of Marketing Synergy Inc – an integrated and social marketing company located in Naperville IL. Founded in 1990, Marketing Synergy works with companies to build measurable, highly profitable marketing programs and the database and analytical systems to drive them. Randy works with B2B and B2C organizations ranging from start-ups to Fortune 100 firms. In addition to Marketing Synergy, Randy has been a Lecturer Professor of Integrated and Social Marketing at Northwestern’s Medill IMC program for the last 21 years. His graduate and undergraduate courses focus on the development of high impact Social IMC marketing programs and many of the course “graduates” work in social marketing today. Dialog with Randy on Twitter @randyhlavac or discuss social issues with the hash tag #NUSocialIMC. Randy can also be reached through his company website.