Originally posted by Financial Social Media.
By Amy McIlwain
As social media becomes an increasingly hot topic in the financial industry, there are 4 recurring hurdles that I constantly read and hear about. Given the reality that social media is here to stay; I want to offer thorough and actionable remedies to these social hiccups.
#4 I don’t think it’s an effective tool for reaching my audience: This may seem like legitimate concern; however, there are a few things to consider as social media continues to develop.
- Young High-Net Worth (HNW) Individuals: A recent study from the Federal Reserve’s Board of Consumer Finances claims that “high net worth individuals under the age of 50 hold 28% of the US wealth across all asset classes”. It goes without question that these waves of young HNW individuals are accustomed and comfortable with new social technologies. A 2011 Spectrum Group Study also reveals that “younger investors are likely to view a financial advisor in a negative light if he/she does not have a social media presence”. Knowing this, it is important to anticipate a growth in young HNW individuals and a widespread transfer of wealth from baby boomers to the more tech savvy Gen X and Gen Y.
- Investors Exchange Information Online: Apart from a way to exchange information, social media is increasingly influencing investors’ decisions. According to the Cisco IBSG report (2011), investors exchange information and guide each other on blogs and message boards. Furthermore, many young HNW individuals use social media channels to converse about investment decisions.
- The percentage of baby boomers using social media is consistently growing: According to a study from the Pew Internet & American Life Project, the use of social networkers by people ages 50+ has grown over 40% in the past 7 years. This illustrates that the older generations are slowly (but surely) adopting and using social media. AARP also cites that in the United States, there is an estimated 270 million internet users and one third of them are from the baby boomer generation — which means you’re looking at more than 80 million baby boomers that are using social media.
# 3 I don’t understand how to use it: This tends to be a recurring hurdle among financial professionals. Truth be told, there are a ton of ways to use social media and a wealth of educational resources to help you along the way. In addition to the aid that archiving companies offer, there are:
According to Financial Social Media’s recent survey of over 100 financial professionals, the top three goals and reasons for using social media are to: gain brand exposure/Increase web traffic, improve relationships with existing clients, and generate leads. For more on this, check out 10 Surprising Insights about Social Media and Financial Advisors.
#2 It’s too time consuming: Financial Social Media’s recent survey also revealed that time was a hurdle for 49% of financial professionals. This makes sense, as financial advisers are very busy people. When push comes to shove, social media is probably close to last on the priority list. While social media requires time, there are many resources and strategies to improve time management and productivity.
- Create systems and processes: Develop an editorial strategy and use it to eliminate the guessing work out of social media. For more information on this, check out The Financial Advisor’s 3-Step Guide to Building an Editorial Calendar.
- Delegate: If you don’t have time for social media, find someone who does. If you are hesitant to hand everything over to someone else, create a system where content and posts go through a stringent approval/editing process.
- Automate: Use automation tools like Hootsuite, libraries of pre-approved content, and RSS Feeds to cut time. While social media is meant to happen in “real-time”, there is no hurt in using automation tools to take a load off your back. As long as there is a healthy combination of automated and manual interaction, you’ll see results.
For more on saving time, check out our blog 10 Social Media Time Savers for Busy Financial Professionals.
#1 Compliance—Compliance and regulatory demands are weighty topics in the financial industry. Let’s face it: social media and compliance go together like oil and water. This table from VP Forum illustrates the vast contrast:
While the regulations set forth by the SEC and FINRA have a reputation of being threatening and perplexing, they aren’t as complicated as they seem. Below are some basic rules to set yourself up for success:
- Archive everything. There are a myriad of archiving companies that are really helpful for social advisors.
- Create well defined social media policies and best practices
- Implement safeguards and define standards to protect non-public consumer information.
- Implement approval processes for static content (i.e. blog posts, Facebook posts)
- Implement supervision standards for interactive content (like chats)
- Don’t offer recommendations, endorsements or advice. You can offer insights, such as general information about a particular topic, but no tailored advisory.
- Be smart. If something seems questionable to post, don’t post it. As long as you use your best judgment, you shouldn’t have any issues.
Considering the vast growth of social media, it is important for advisers to recognize challenges and develop strategies for overcoming them. If any of the four hurdles above are sidelining you, it’s time to take steps. Please comment and share with us any hurdles you may have encountered and how you overcame them. I look forward to your feedback!