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National Planning Holdings (NPH), the independent broker/dealer network of Lansing, Mich.-based Jackson National Life Insurance Company, plans to roll out a social media initiative this fall, which will allow its 3,563 reps to use Twitter, LinkedIn and Facebook to communicate with clients. The firm partnered with Erado, which will monitor, track and archive reps’ social media activity at its four broker/dealers, including INVEST Financial Corporation, Investment Centers of America, National Planning Corporation and SII Investments.
“Clearly, social media has reached critical mass and is becoming an increasingly important communication tool for financial advisers,” said Jim Livingston, president and CEO of NPH, in a statement.
The new program is part of a proactive approach to help advisors leverage new technology platforms, including social media, as a way to connect with clients and prospects, said Andrew Silver, spokesman for NPH.
Today there are 100,000 advisors in the U.S. who have a profile on LinkedIn, compared to just 80,000 three months ago, said Sarah Carter, vice president of marketing at Actiance, during a Business Development Institute webinar last week. Last year, nearly two-thirds of adults with a financial advisor had an account on Facebook, LinkedIn or Twitter, said Bill Doyle, vice president at Forrester Research, who also presented during the webinar.
Currently, NPH advisors’ static content, such as profile pages, has to be submitted and pre-approved by the firm’s compliance department, while ongoing, interactive posts are not allowed at all. But starting in the fall, advisors will be allowed to post interactive content, such as messages and wall posts, in real time, and NPH will do a post-review of that content, similar to e-mail monitoring. Static content will still need to be pre-approved.
Before using the program through Erado, reps and OSJs will also have to participate in mandatory training.
In early 2010, FINRA issued social media guidance that said all b/d member firms should have a system in place for tracking and archiving social media communications. The agency still requires that firms pre-approve content that is static in nature.
Financial firms such as NPH have been bus adopting social media policies as reps demand to use these new communications tools with customers. Independent firms including Advisor Group, Securities America, Raymond James, Commonwealth and Cambridge Investment Research are just a few that now allow reps to use social media sites and post in real-time. Morgan Stanley Smith Barney is also allowing reps to use Twitter and LinkedIn for pre-approved messages.
Despite the fact that advisors are flocking to social networks, many financial firms still do not support the use of social networks because of the compliance hurdles, said Doyle. In addition, the best clients and advisors are older, he said, and so less likely to be natural users of this kind of technology.
“The best wealth managers and the best clients broadly are older,” Doyle said. “Baby Boomers have the most investable assets. Seniors right behind them. And that same principle holds true for producers. Older financial advisors, older agents, are the ones with the biggest books of business. And these older clients are the ones who are least likely to use social networks.”
The younger generations lead in the adoption of social networks, with 87 percent of Generation Y and 77 percent of Generation X having an account on at least one social networking site, versus 47 percent for seniors and 56 percent of older boomers, Doyle said. He believes firms cannot avoid adopting a social media strategy anymore because the younger generations’ digital behaviors will follow them as they get older.
“These wealth management firms who rely on traditional channels need to get moving,” Doyle said. “At least they need to assess their customer’s appetite for social and mobile tools and they need to decide on a strategy even if that strategy is to wait.”
Social media programs should be put in place with the expectation that future generations of advisors and clients will need them, Silver said. “From a recruiting standpoint, from a business development standpoint, and from a practice management support standpoint, this is something that needs to be in place.”