The Not-So-Great Robo Innovation: Trash Talking

TrashOnline

There was no full-page ad in The Wall Street Journal when Wealthfront CEO Adam Nash announced that the company was reducing opening account minimums. Instead he turned to Medium, the blog-publishing platform, to make the announcement and openly lance into the competition for good measure.

It wasn't the first time Nash used Medium as his platform to dig at competitors. But this time around, other digital wealth management executives parried his critiques on the site also, including Betterment's Jon Stein and Bill Harris of Personal Capital.

“Please don’t pee on our leg and tell us it’s raining,” Firefox founder Blake Ross wrote in a sarcastic anti-Wealthfront piece in Medium.

Such diatribes are in stark contrast with what any advisor or client might be used to hearing from a traditional wealth advisory firm, says one marketing expert.

“It’s a cultural thing,” says Marie Swift, CEO of Impact Communications, a public relations firm servicing the financial services industry. “They (robo advisors) are really technological providers.”

Medium has become the message platform of choice for tech in general, said Greg Muender, a startup vet and author of “The Ultimate Guide to Medium.” Medium, a Silicon Valley darling, was hatched three years ago by Twitter and Blogger founder Evan Williams.  

The site's clean design and transparency holds sway over the digital-first crowd. There are no anonymous accounts, making it an open venue to brand a personal or company identity.

“Medium deeply integrates your identity, which is important in tech culture,” says Muender, noting how the platform can be connected to a user’s Twitter and Facebook accounts.

Another selling point is that people can leave notes on the side of a post, says Joe Ziemer, director of communications for Betterment. People can even have a whole different conversation in the notes section.

"Medium is a great platform to share our content with. It's well designed and very user-friendly, two qualities we value very highly at Betterment,” said Stein in an email message as he was traveling internationally.

“Medium is trying to build a new kind of media platform that’s centered around conversation and thoughtful discussion,” says Andy Doyle, leader of operations at Medium. “We didn’t seek out Adam (Nash) and Jon (Stein), but we are happy they found the platform to their liking and want more people to use it that way.”

CAREFUL, DIPLOMATIC

Digital platforms and added transparency doesn't have to result in trash-talking, however.

Swift says traditional wealth management firms are mindful to be more careful and diplomatic if there are disagreements of philosophy or approach. The reason? The financial service industry is small, she says. A competitor today may be a peer in a study group or you may one day sit together on a board.

There was no comment from Nash, who posted on Medium back in March to attack Charles Schwab when it launched its own robo advisor service.

There's also regulation: when it comes to public relations, traditional wealth management firms have to consider protecting their reputation and their compliance responsibility with regards to FINRA and SEC, Swift says. “They are very thoughtful about what they put on the Internet. They don’t just dash something and put it on Medium."

Wells Fargo Advisors, for instance, just only recently launched its social media program with 100 advisors. It expects to have 1,000 on board by the end of 2015. The plan next year is for the firm to have 5,000 out of its 15,000-plus advisors using social media tools.

"While social media is a powerful tool for business, it is also a potentially harmful one if not used appropriately, Jeff Leonard, the firm's SVP of digital marketing and social media, told On Wall Street.

"We encourage our advisors to maintain their personal social media profiles (e.g. Facebook), but with an eye toward how they are presenting themselves online."

Wells and J.P. Morgan Chase have also refocused how they engage with clients online, the former launching a site that tells stories of its employees in an effort to humanize the bank, the latter re-launching its site so that it offers relevant news article feed in a Vox-like scrolling format.

Swift advises her clients to put any thought leadership pieces on a company website or blog, a space they can control. The only exception for a third party outlet would be a credible news publication, she adds.

“Medium can go away,” Swift says, referring to the boom and bust cycle of news and blogging startups.

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