Social Media: Don’t Believe the Hype

[Optirate]

No doubt buggy-whip makers had similar feelings about horseless carriages. Failure to implement a process-driven approach, measurement and accountability to marketing cannot be faulted on marketing - social media or traditional marketing.

[ByrnesConsulting]

In regards to social media, I disagree with the comment that “nobody has any real evidence that it’s going to work”. Advisors and financial service companies that are successfully using social media are experiencing lowered marketing expenses, increased awareness, and more leads.

For these reasons and others, it is good to see that “90% of financial services companies expect to have a budget dedicated to social media by 2012”.

Those using social media now have a clear competitive advantage over those that are late adaptors. Social media should be a part of every firm’s 2011 marketing strategy!

Mike Byrnes, President
Byrnes Consulting, LLC
http://byrnesconsulting.com/
http://twitter.com/ByrnesConsultin

[TJ Gilsenan]

A few observations:

1. The term "financial services companies" is too broad - Whether social media or anything else, an individual advisor doesn't have the same goals or resources as Vanguard or Wells Fargo. For example, a fund company has all kinds of people who use their products that they will never meet or know. Conversely, face-to-face one-on-one relationships are the basis for most Advisor practices. Large companies use social media to approximate real client relationships. Advisors have no such need.
2. The term "going to work" is too conditional - "going to work" for whom? Accomplishing what goals? I think its fair to say that SM can work to help large companies develop community among their users. I'm not sure what SM can do for an individual Advisor who already knows each of his clients personally, talks to them regularly, and understands their investment goals. Speaking as an Advisor's client, I might ask "What are you going to tell me in a tweet or a post that I don't already know abut you?".

This is a post I wrote recently about this very subject called "Is Social Media for Advisors Overblown"


TJ Gilsenan
The Interactive Advisor

[Bradly T.]

Until FINRA adopts significant rule changes related to their definition of "marketing" materials and communications (which includes every form of contact, advertising, and content) and their specificity on the advisors' geographic location related to their "audience" (which includes everyone who might possibly be exposed to content), I too, am a little confused by the encouragement and broadsided claims by SM proponents. And I appreciate the differences pointed out by Gilsenan in both purpose and audience related. I understand (or am beginning to understand) the power and potential of the digital, instant communication, age. Do my clients want or need me to become a contributor to the noise and volume of data and endless contact they are already burdened by? To be accessable and responsive is one thing (email and website seems sufficient for both, at least for now) but what have I to tweet about? Chat rooms and facebook are patently forbidden for all regreps to even identify their licenses or credential (this includes dually registereds), let alone to seek an audience or give advice. I am IAR so I'm not as familiar with restrictions for RIAs. Perhaps they can say anything to anyone anywhere?

[wtpj]

It is not just about FaceBook or Twitter. You have to have a plan when you want to use Social Media. You can't make it up as you go because as humans we forget. Also you have to build your Brand out there and it is not about a product or company it is about "YOU" the person in Social Media ergo the word Social.


You have to be on all platforms for the Social Media contacts since people are different and once they get use to one they don't want to change. If you want to be truly successful in "Social Media" hire a 20 year old and let them run within your guuidelines.

[kipgregory]

Wow! Hype?! That certainly hasn't been our experience. For more than two years now we have been helping companies and individuals across the industry generate millions of dollars in new asset flows using information and connections surfaced via social networking sites.

Those people are succeeding in part because, while everyone else has focused on restrictions around TALKING (i.e. what you CAN'T do (yet) because of concern for compliance and supervision issues), they are LISTENING... and using what they "hear" and read to a) get and stay closer to their current clients, b) surface unknown connections to prospects, and c) take better control of the referral process--the driver of new business for every advisor (and virtually every professional services business) out there.

Frankly, those who understand the prospecting power of these sites hope the rest of the industry remains blind to that realization because it means less competition for them. And it's not all independents by the way; a number work within firms that restrict access to the sites.

Make no mistake, the capabilities that social media delivers to the savvy advisor or wholesaler who knows what to do with them are mind-boggling... and game-changing. Just how much? $250-300 million worth of new assets over the past year alone for one mutual fund client.

Kip Gregory
http://www.gregory-group.com

[Mr.6]

We are using ADWORDS at our firm for Alternative Fixed Products and it is a high
price, but the response has been great. Don't know much about social media hype.



But we know what works! Google works!



Paul C. Kopp

RIA

Kopp Estate Planning LLC

[url=mailto:applefreelance@gmail.com]applefreelance@gmail.com[/url]

954-821-8404

[toddburkhalter]

I would you suggest that the hype is only muted at this point, due to so few advisors being permitted to utilizing all that is available. Our firm can point to half of the firms 2010 income deriving from on-line activity. There is success to be had.

[Bradly T.]

toddb - please expand....there's a great deal of difference in "on-line", web search/google assist, web site interfacing, etc. and "social media", defined as facebook, twitter, etc. I don't think anyone disputes the value of web based options, it's the social media formats at issue. I'm still waiting to hear their value or applications within compliance constraints. I found the comment by kipg about "listening" interesting but vague. Listening to what and who about what and why? I'm not arguing, I'm genuinely curious about how to apply 21st century connectivity.