Sometimes, the biggest challenge facing embracing new technologies is knowing where to start. And, when it comes to social media and investment advisors, this is very true.
There are countless pitfalls and compliance challenges. But, it’s not as hard as you think. It starts with an understanding of the regulatory picture. And, FINRA spells it out nicely for you.
Read on to get the link to FINRA’s PDF on Social Media
“Total abstinence is so excellent a thing that it cannot be carried to too great an extent. In my passion for it I even carry it so far as to totally abstain from total abstinence itself” - Mark Twain
When FINRA made its recommendations regarding social media in January 2010, the industry reacted by clamping down on social media’s use. Interestingly, but not unexpectedly, forced abstinence did little to curb employees Facebook and Twitter appetite. The result? Employees strengthened relationships in their personal networks. And, employers missed out.
Social media is good for business, or so says conventional wisdom. But, many investment managers are staying on the sidelines. Why? Because Vanguard can make an investment in social media as a rounding error while the owner of a small asset manager directly feels the pinch.
And, here lies the challenge for those tasked with building robust online social interactions at smaller firms. How do you justify the investment, when the results are often hard to quantify?
Relationship building has never been cheap. Most RIA’s lavishly outfit offices and waiting rooms. Meals and entertainment budgets remain a staple. And, you’re unlikely to see managers replacing heavy weight letterhead with copy paper. Why do firms spend money this way? Because clients are image conscious.
The same holds true for social media. If investment managers are going to make the commitment to build deeper relationships with clients and prospects using social media, they’re going to have to make a commitment to spending money to do it right. If they fail to make the necessary commitment, they risk damaging their appearance. Which, in an image conscious industry is risky.
Choosing to embrace social media means worrying less about the immediate payback and recognizing it as a valuable tool for planting seeds. A successful social media presence will yield results, by
- Boosting referral rates
- Expanding further into the client’s family tree, and
- Increasing the number opportunities to generate business by increasing interactions.
After all, successful advisors don’t build their business for the short term. Instead, they take a long view. They know relationships built today will yield larger, more integrated relationships in the future. And, this alone is why financial advisors should take social media seriously.
AdvisorSpark: advisorspark@gmail; 603.742.7100
"Any emotion, if it is sincere, is involuntary."
— Mark Twain
"Money is a tool. If used incorrectly, it breaks things” - Todd Campbell, Chief Creative Officer, AdvisorSpark"