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Practice Management

Savvy wealth managers are exploiting social media tools to help them prospect, as well as manage their ongoing client relations.

This Practice Management article is intended for financial advisors only (registered representatives of broker/dealers or associated persons of Registered Investment Advisors).

Morgan Stanley wasted no time. As soon as FINRA released its first industry guidelines for blogging and social media usage in January 2010, the firm began developing ways for its advisors to launch themselves into the blogosphere and beyond.

“We were early adopters,” says Valentina Chtchedrine, executive director for digital strategy. “And we continue to be the only wirehouse that allows advisors to use LinkedIn and Twitter with full access.” She estimates that about 35% of the firm’s advisors—or nearly 6,000 of them—have gone through the process of getting approval to engage in social media networking professionally.

To ensure those advisors are compliant, effective and comfortable with their social media activities, Chtchedrine and her team tap into a wide array of tools, such as those from Socialware and Hearsay Social, two technology companies that provide software for ensuring that advisors and their employers remain within regulatory bounds. Their offerings include features like content pre-review and archiving of all posted materials.

Other products are designed to help advisors market and promote themselves via social networks. These include offerings from vendors like Relationship Science, which offers search tools to help advisors uncover relationship-enhancing details about clients’ business and charitable contacts, and PeopleLinx, whose products help advisors establish a strong social media presence. Still other providers, like New York-based Vestorly, sell online services that let advisors post items, such as a tweet or a blog, and then track which of their clients read and share it and with whom.

“There has been a proliferation of companies offering to serve a myriad of needs,” Chtchedrine observes.

For the past two years at Morgan Stanley, advisors engaged in social media marketing have relied on tools from Socialware, based in Austin, Texas, to remain compliant. These include a dashboard from which they can dispatch and track their Web postings, have their content pre-reviewed for compliance and ensure that it’s archived—as FINRA requires. The subscription service starts at about $20 per user per month.

Wells Fargo is another Socialware customer. Chris X. Moloney, a senior vice president and chief marketing officer for Wells Fargo Advisors, says the firm started using Socialware in September 2012, as part of a pilot project involving about 100 of Wells Fargo’s roughly 15,500 advisors.

The software, according to Bruce Milne, Socialware’s chief marketing officer, “automates the process of authoring, reviewing and approving social media profiles, obviating the need for error-prone and time-intensive manual profile editing and review and preventing unapproved profiles from misrepresenting the advisor’s credentials.”

Now Moloney, who prior to joining Wells Fargo helped launch social media marketing for Scottrade and Experian, is planning to expand the project tenfold, as part of an effort to facilitate social media usage among more than 1,000 Wells Fargo advisors. But as he prepares this more sweeping effort, the wealth management exec says he’s undecided as to whether Socialware’s offerings will remain part of the solution set he ultimately rolls out.

When the company first chose Socialware for its tool set, the choice was “very much driven by its compliance capabilities. At the time we made the selection, Socialware’s ability to cater to our business was attractive.” But since then, the market has become crowded with new vendors offering new products, inducing Moloney to revisit the investment firm’s original decision.

One reason is the amount of time it takes an advisor to get up to speed with the software, something Moloney became increasingly aware of through the course of the pilot program.

Although Milne claims it only takes an hour for advisors to become “proficient” with the Socialware platform and less than five hours to become “effective,” Moloney expresses less confidence about such an accelerated learning curve. “The way all the companies describe this to you, it seems as if you just push a big orange button and all this works,” he says with a chuckle. “But we know that is never the case with software.”

While the principal “driver” for whatever social media marketing technology he ultimately chooses for Wells Fargo will remain compliance, workflow is another important consideration. “How easily does the tool interconnect with our archiving tools?” is the sort of question Moloney expects to pose to prospective tool providers.

Other points of comparison on his list include how readily a tool can be used to track who has clicked on, read and engaged with advisors’ postings on various social media sites.

At Wedbush, Socialware competitor Hearsay Social is the social media marketing tool of choice. About 100 of Wedbush’s 400 advisors use the software, which allows them “to participate in social media conversations in a compliant, user-friendly way,” reports Natalie Grasso, vice president and head of marketing for the investment firm.

One reason is a feature Hearsay dubs “social signals.” These alert advisors through their dashboards about important events in clients’ lives, as soon as the client has posted news of the event on a social media site. Grasso also likes the way the Hearsay platform integrates news media feeds and allows for mobile access through smartphones and tablets.

It took Wedbush 30 days to deploy the Hearsay tools, with most of that time going toward setting up the archiving functionality. Once that was complete, Grasso reports that the rest of the transition was relatively simple “as the platform is quite intuitive and easy to navigate.” She was also pleased that “dedicated Hearsay team members walked us through every step of the transition.”

Katie Berg, product manager for digital assets at Raymond James Financial, also qualifies as a Hearsay fan. “They cover all our needs from a compliance standpoint, offering both monitoring and archiving,” she says. Berg, like Grasso, particularly appreciates the social signals feature, which allows advisors to be “proactive” when opportunities arise to offer clients their services. “That was appealing to us,” she says.

Since partnering with Hearsay last July, Raymond James has added 50 to 100 users a month. Currently, about 2,300 of the investment firm’s 5,400 advisors are on the platform. To help support those growing ranks, Berg welcomes the training Hearsay has provided. “We’ve been working with them on a whole bunch of education and training programs,” she says, including a webinar on best social media marketing practices for advisors. “The beauty of Hearsay,” Berg says, is that it allows advisors to write their own content, and “you don’t have to spend a ton of learning time to ‘get’ social media.”

Peter Barlow is one of the Raymond James advisors using Hearsay. A vice president of Raymond James affiliate Princeton Wealth Advisors, which has $1 billion-plus assets under management, Barlow took a shine to social media marketing after he experienced Twitter.

“I like the way news travels very quickly,” with Twitter, the Princeton, N.J.-based advisor says. Using social media “is a great way to reach out to the next generation.”

Not so coincidentally, it’s a member of that generation that’s helping Barlow and his firm get up to speed with all things social. Sean Smollon, a former Princeton Wealth intern turned client associate, has been instrumental in rolling out Hearsay at Princeton Wealth and is enthusiastic about the marketing platform. “It makes it easy for advisors who don’t have much social media experience,” Smollon says. “The biggest attraction is the layout of its dashboard, which gives you control of your voice, while keeping you in compliance.” He adds, “It’s user friendly to the point that you don’t even know it’s there.”

Gary Liu, vice president of marketing for Hearsay, says for large financial services firms one big advantage his software has over rival products is the number of users it can support. “The difference between us and others is that we have the ability to scale from 1,000 to 10,000 users,” he claims.

The demand for social media access on the part of advisors will only grow, Liu contends. “Advisors need to build their business either through word of mouth or referrals; social media allows them to do both.” Using networks like LinkedIn and Twitter, he says, “allows advisors to make themselves visible on the Web and establish “a professional presence online.”

Other tools are attracting other wealth management firms. Among the more popular are those from PeopleLinx, a Philadelphia-based software purveyor started in 2009 by former employees of LinkedIn.

PeopleLinx offers a social media marketing tool for scoring advisor interactions with clients and prospects on LinkedIn, Twitter and other social networks. Josh Druck, the marketing coordinator for PeopleLinx, says the tool generates its effectiveness scores against a set of pre-determined criteria and provides “personalized guidance for each employee” on how to enhance his or her profile and build a more relevant network.

Moreton Retirement Partners, an LPL affiliated firm in Denver, Colo., with $2 billion under management, plans to roll out PeopleLinx to the firm’s 13 advisors. A month from now, Melinda Dransfield, Moreton’s operation and marketing manager, expects that the firm’s entire team will be keeping tabs on their PeopleLinx scores through the software’s dashboard. Ways to improve those scores will also be presented.

Dransfield anticipates that “PeopleLinx will engage all of our team members and help them become comfortable” with social media.

From a management standpoint, PeopleLinx provides a birds-eye view of information about a team’s social media engagement results. “We’ll be able to see who is getting more traction and give specific suggestions on how they can improve,” says Moreton’s marketing manager. Engagement scores can be evaluated based on parameters set by the firm, allowing it to frame the type of social media networking attention it seeks for its advisors. In Moreton’s case, advisors will accumulate more points as they acquire more followers among corporate human resources departments—Moreton’s top marketing target.

Yet another tool garnering attention from wealth management firms is RelSci from New York-based Relationship Science. RelSci takes advantage of all the information available on the Web, including what others post on social media networks.

Subscribers get access to an online database that provides detailed work, family and deal-making history of more than 3 million people at 1 million organizations. When advisors plug in their own client list and then use that as a reference for searching the database, they can identify connections between their clients and other high-net-worth individuals to “generate warm leads.”

“We are bringing sophistication to our customers and helping them unlock hidden opportunities within the relationships they already have,” says Josh Mait, chief marketing officer at Relationship Science. “We’ve collected a tremendous amount of data on a group of people who are very senior in their careers,” he explains. Advisors who use the tool “are going get really smart on either their prospects or their existing clients.”

Eamon Walsh, an advisor for National Financial Partners, a New York-based insurance brokerage, is a Relationship Science user who describes the RelSci tool as “LinkedIn on steroids.” Walsh’s high-net-worth clients “do not hang out on Facebook,” but they tend to “cluster together” in places like philanthropic organizations. RelSci’s database helps him uncover those connections, and it updates him through email alerts when they change.

Walsh is also quick to point out that plugging his contacts into the database does not make them available to other advisors. “They are walled off,” he says.

As professional use of social media continues to mature, observes Morgan Stanley’s Chtchedrine, so will the tools that support such usage and the metrics for measuring engagement. The key point to keep in mind, she says, is that all these tools, along with the social networks they monitor, are just means to an end.

 “Our ultimate goal is to make sure our advisors connect with clients and prospects using the mediums that the clients prefer. Social media has changed the way people communicate,” she notes. “We are on top of those trends and want to have the tools to stay there.”

— by Miriam Rozen


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