This week's blog is by guest blogger, Jessica Weiner. Jessica is the founder of The Value Quotient, which provides solutions to businesses associated with retirement plans. Every discussion begins with the same question: "What problem(s) can we help you solve?"
Mining for Gold in Social Media: Things Advisors need to get started.
When I left the corporate world and went out on my own a few years ago, I had to learn pretty fast how to get the most value for my marketing dollars. That’s how I came to be so passionate about social media marketing.
Social media marketing gets me to the right people with the right message. Best of all, it’s ridiculously inexpensive. Right people. Low cost. Done deal.
Based on my experience, here’s your shortcut to getting started on social media. “I can’t make sales so why would I do this colossal waste of time?”
The attitude among advisors and TPAs is that social media is useless as a sales tool in the retirement plan industry. Social media is not a marketing strategy unto itself; rather it is one of many tools in your overall marketing strategy, along with cold calling & networking. “What is proven to bring in business?” says Larry Steinberg, The Steinberg Financial Group. “There are lots of strategies out there and while some may work for one person, they don’t work for others who are wired differently. What is important in my opinion is to have an overall strategy and then use the available tools to implement the strategy.Social media is a whole new tool belt.”
Many have the misperception that someone reading your LinkedIn and Twitter posts will call you and give you their business. When that doesn’t happen in the first month or two, the medium is deemed to be a failure.
“Like any other marketing, you have to commit to it and not be discouraged out of the box,” says Paul Schatz of Heritage Capital LLC. “It’s a marathon, not a sprint.” Heritage Capital has a company Facebook page, and Schatz has about 400 Twitter followers.
Step 1: Research
A baseline understanding of the Big Four — Facebook, LinkedIn, Twitter and YouTube — is key to starting on your game plan. If you are new to any of these sites, you can learn more about them by going to their home pages and reviewing the user guides, usually found under “Help” on the top or bottom of the page. You do not need an account to do so.
To see how your peers use the sites, Google phrases like “(xyz) on Facebook” or “(xyz) on Twitter.” If a business has a custom URL you can view their page without being a member of the site.
On the sites, do key word searches on terms like 401(k), retirement plan, financial advisor, and whatever else you can think of. On LinkedIn you will be looking for groups. You should join them. On YouTube, you are searching for videos. On Twitter you will “follow.”
Read and view with an eye toward assessing what works or doesn’t work for you. Additionally, ask prospects, clients, referral sources and friends which sites they use and how they use them. After a few weeks you’ll be familiar with others’ approaches:
- Target audience
- Sites used
- Type of content, such as links to articles, original writing, and market updates
- Frequency of posts
- Tone – personal, humorous, direct, professional
Step 2: Call Your Compliance Department
Note: Non-producing TPAs and certain RIAs are not supervised by national level regulatory authorities such as the SEC and FINRA, but may instead be regulated at the state level.
By now, you have a general idea of what you think you want to do: which site(s), your target audience, content, and so on. Time to talk to Compliance.
By way of background, in January 2010 FINRA released Regulatory Notice 10-06: Guidance on Blog and Social Networking Web Sites. Broadly summarized, 10-06 states that the same rules apply to social networking as to all other communications with the public, including supervision, record retention, public appearances, advertising, solicitation, and so on.
Communications on social networking sites, however, do not exactly mirror traditional forms. With the media being so new, FINRA has yet to issue firm guidelines on a number of issues. Much is left to the interpretation of the supervising firms.
Even if your firm has a published social media policy, that’s not where you want to begin and end your efforts. Call and talk to Compliance, advises Stephen Selby, Director of Regulatory services for LIMRA. “Policies are written broadly. Firms don’t want to stifle sales, but they also don’t want to aggravate FINRA. Compliance’s job is to read between the lines.”
Selby also made the point that since Compliance is a service producers pay for, they should take advantage of the expertise. “The complexity of social media communications is too great, and producers should not try to tackle it on their own.”
When you contact your Compliance Department, be prepared to tell them what you are trying to accomplish and ask them to guide you. Simply calling and saying you want to use social media and asking them what to do won’t get you anywhere.
Specifics will vary from firm to firm. However, here are a few common points:
- Communications on LinkedIn are different than those on say, Twitter or Facebook. LinkedIn is a professional site that is considered peer-to-peer, but is still subject to the same set of public communications regulations as any other form of advertising.
- Recommendations, either for you or by you, may bump into the testimonial rules.
- Professional and personal usage must be kept separate. For example, if you are on Facebook with friends & family, don’t mention your work or your firm name. Similarly, avoid having friends and family on a company page.
Step 3: Risk Assessment
All of the advisors interviewed said that risk in using social media as a platform was the least of their concerns.
“In my mind, social media is very low risk. My biggest concern is putting something out there that is factually incorrect or shows very flawed reasoning. What goes on the internet stays on the internet. Much of what I post is opinion, so that minimizes the concern about something being factually incorrect. I also try to steer clear of any topics that are overly inflammatory. I want to initiate positive discussion, not stir the pot”, said Adam Pozek, Compliance & Consulting Partner with DWC ERISA Consultants, LLC. Pozek writes a blog called Pozek on Pension, and has 600 Twitter followers.
Also, keep in mind that if someone posts something negative about you on one of your own pages, you have the power to remove it.
Ironically, the larger risk exists right now, for every firm, through their other hat as employer, according to Russ Dempsey, Vice President & Chief Legal Officer, United Retirement Plan Consultants.
“The risk is when employees cross the line and harass other employees, reveal confidential information without approval, and what they do to the employer’s reputation in off-hours,” says Dempsey. “The claims that are out there today are for hostile work environment, defamation, and discrimination.”
“Additionally, in hiring or disciplining, employers will go out to social media and obtain protected information such as religious affiliation. It’s illegal to make employment decisions based on information obtained through social media.”
Businesses must address employees’ social media usage either through a confidentiality agreement, employment agreement, or the employee handbook.
Success Stories
Those that engage in social media marketing, first and foremost, enjoy it. They also believe that the power of name recognition and branding contribute significantly to success.
Having said that, yes, there is business attributable to an effective social media presence.
“I have actually won business from my blog,” says Pozek. “One of my posts was about the IRS reduced VCP fee for non-amenders who voluntarily corrected within a certain timeframe. A small business owner in California came across that entry and e-mailed me with questions. Two or three e-mails later, I was hired to help them fix their problem. With that said, my goal with social media is to build name recognition. I do not expect to directly win business, so the California client was a bonus. I regularly have people come up to me at conferences and introduce themselves as having followed my social media activity. It’s really like just about any type of marketing…it’s branding.”
Jeff Rose, who has nearly 2,000 Twitter followers and writes a blog called “Good Financial Cents” says, “At the end of the day, it’s all about 2 things for me: 1. Increase my exposure to get in front of more prospects 2. Bring on new ideal clients.
“I was blogging for about 3 months before I was able to leverage my blog to land a recurring spot on our local news station. It was another 3 months before I attained my first client from my blogging efforts. That client was and still is my largest client and is also my friend on Facebook.” Larry Steinberg of Steinberg Financial has 1,000 Twitter followers. His value assessment is both financial and emotional, something we can all relate to: “The two main items I will measure at the end of this year are gross income and my mental state and work it out from there.”
Visit NAPLIA's Social Media Risk Management Resources
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