As many investment and wealth management firms begin to dip their toes into social media, they are typically focused on two main activities. First, they draft social media policies to provide guidelines as to what is acceptable and compliant behaviour for financial professionals in social networks. Think of these policies the “thou shalt nots.” And second, firms deploy some kind of compliance monitoring software to ensure they can fulfill their regulatory obligations as their employees begin blogging, friending, connecting, following and tweeting with clients and prospects. This software becomes part of the social media “plumbling”.
There is no question that clear social media policies and effective compliance monitoring software are required aspects of any financial firm’s foray into the social media space.
But these rule-setting and policing efforts are primarily motivated to mitigate the perceived risks associated with a firm’s representatives engaging in online settings. They don’t prescribe to an advisor or other financial professional within a firm what actions they should take online in order to succeed — in order to position their personal brand and firm’s brand effectively online and grow the business.
Advisors need more than training on the “thou shalt nots” to succeed. They also need to receive instruction and coaching on what actions they CAN and SHOULD take in social media networks to build their credibility and trust online and engage clients and prospects effectively. And financial professionals need more than just the social media compliance plumbing to succeed. They need great content — some internally produced, lots externally sourced and shared – to fill their social media pipelines and strengthen their networks.
Social media without a strategy is like having a map and compass with no destination.
An informal survey done by SmartBrief on Social Media reveals that as many as 3 in 10 businesses using social media report not having a strategy.
My anecdotal observations suggests that an even larger proportion, perhaps the majority, of firms in the financial services and wealth management industry do not have a coherent strategy to guide their social media efforts — and this includes firms with social media policies and compliance software in place. Even the purveyors of compliance software are prodding the industry to move the conversation from rules and regulations to how to support business goals, objectives and strategy in social media.
Part of the problem, when discussing “strategy” in a business setting, is that the term itself is widely misunderstood. Perhaps, it is easier to start with what it is not. It is not a plan, a timeline, a goal or the tactics you will use to achieve a goal. Instead, your strategy should describe how you will win and succeed in the marketplace. It’s a kind of if-then hypothesis: if we do this, then we expect to achieve that.
So what are the key strategic considerations for successful use of social media in the financial services and wealth management industry? Here are some suggestions:
- How to translate your social media policy’s litany of “thou shalt nots” into an actionable set of “can dos” and “should dos” that will support your team of financial professionals to use social media effectively and grow their businesses?
- How to support your team of financial professionals in the field to develop their social voices and personal brands in ways that are consistent with your firm’s brand?
- How to align your social media activities in the field with your overall organizational goals in terms of marketing, communications, customer service and human resources?
- How to leverage content to add value and build engagement with clients in an information overloaded world?
The social media strategy transit map shows various intersecting lines of social activity that feed a successful strategy.
Effective use of social media in financial services firms needs to be built on a solid understanding of compliance issues, as well as a wide range of other strategic considerations and customer data that emerges from engagement.