REFORMED BROKER: Social Media - Can FAs Maintain Authenticity?

Yesterday I had the pleasure of moderating an important panel at the Bloomberg building in New York City on how financial advisors are adopting social media. The panel endeavored to discover how advisors and brokers could maintain authenticity while working within the confines of pre-approved messages and firm compliance directives.

On the panel were Eric Rehl, who heads up social media for brokerage firm Robert W. Baird, Joanna Belbey of Actiance, a solutions provider for firms using social media, and Jaime Fitzgerald of Fitzgerald Analytics, a consultant who helps the industry measure their success and ROI with social campaigns.

My takeaway from the discussion is that we’re still in a very embryonic state with all of this stuff. Some of the big “success stories” discussed involved only a handful of new accounts opened as a result of social media interaction and the dollar figures involved were only in the $1- or $2-million range. While this is not exactly chump change, it is also not a sum that would propel large swathes of the industry into uncharted waters.

As an FA who’s had a great deal of success using social media, I know firsthand how much work goes into it so I’m not surprised to hear that only a handful of adopters are seeing much traction. But I also believe that this will begin to change in 2012 as more advisors get serious about this channel.

Here are some of the key discussion topics and questions we hit on:

1. Similarity to adoption of email: When I first started in the business (late 1990s), we saw email come along and it took financial firms a few years to figure out what to do with it. At first the brokers couldn't use it, then they could use it but only with permission and from the firm’s main account, then they could use it but messages were pre-approved and finally, they could use it freely—but it was monitored.

2. Choice of platform: Is there one social platform that makes more sense than others for social media in finance? LinkedIn, for example, feels inherently more corporate and businesslike than Twitter.

3. Measurement of ROI: How should FAs and their firms judge whether or not they’re succeeding or failing at social media? Is it all about how many inbound inquiries or assets under management they get or is there a higher gauge?

4. Regulatory Unknowns: While both Finra and the SEC have laid out a set of broad guidelines and have been clear about the fact that traditional advertising standards still apply to social media, isn’t there still some sense of the unknown in terms of how certain behavior and exchanges with the public might be looked at? Is there a sense that the regulators are saying “we don’t 100% know what constitutes a violation - but we’ll know it when we see it”?

5. Large firms and authenticity: How important will it be for the big firms to make sure all of their representatives “stay on message” and isn’t this the advantage that the small firms have over the big firms?

6. Pilot programs: Why does it seem that the large firms are only allowing their more senior, established advisors to use social media - doesn’t it defeat the purpose when you consider that most of these people don’t really need to use it at this point in their careers?

7. Spontaneity: Given the fact that the medium we’re discussing is about sharing and spontaneity and being human, isn’t that, to some extent, antithetical to it working for large, coordinated groups of corporate spokespeople?

What do you think about these issues? How are they driving your firm’s social media plans?