LinkedIn -- The Gateway Drug to Social Media for Financial Services and Others

There are many reports which support the idea that today's potential client will be intolerant of their wealth manager's reluctance to engage on social media platforms.
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In a new study by Swiss consulting firm, Assetinum, it's reported that most wealth managers and private banks are having difficulties and are actually quite "clumsy" when it comes to their social media marketing. I am NOT surprised. Remember, that financial services is comprised of mainly left-brained quantitative thinkers, i.e. not naturally social nor risk-takers.

As reported recently in Family Wealth Report, Assentinum recently assessed more than 50 of the world's largest private banks and wealth management firms on a scale of 1-100. The average rating was only 43. While consumer brands and others have leapt into social media, financial services has been a laggard industry. Its disappointing that these firms and individuals who could benefit the most from this far-reaching, inexpensive phenomenon still are in a hibernation mode -- hiding behind misconceptions such as compliance issues or the notion that this is a "fad!"

The Internet has changed our entire communication landscape. There is reach via social media that is easy and inexpensive. But although almost 100 percent of wealth managers/private bankers have a website, it is estimated that only 10 percent use social media. There are many reports which support the idea that today's potential client will be intolerant of their wealth manager's reluctance to engage on these platforms. As baby-boomers implement effective succession plans and wealth is created via IPO's and start-ups, today's wealth-holder is much younger than in the past. They look for information on social media platforms and via the Internet. They do not rely on word of mouth as baby-boomers have in the past.

The best and easiest social media platform for wealth management firms, private banks and others to begin on is LinkedIn. LinkedIn's user interface is more familiar and it's an obvious business platform which makes it the path of least resistance. That is why I call LinkedIn the "gateway drug" social media.

Financial services has been slow to adopt most new ideas. No surprise due to the conservative nature of money managers and large institutions. Most wealth managers/financial advisors continue to eschew social media by claiming that its too complicated to be compliant. That is the easy way out! Compliance and legal departments must make efforts to "marry" financial services regulatory environment and social media although they are at natural odds with each other.

The industry itself must recognize the paradigm shift into digital channels and look to embrace SEC and FINRA guidelines instead of hiding on the sidelines and pretending that the Internet is going away. The guidelines are quite similar to those already in place for other communications between advisors and the public. Don't make promises on return and other simple notions like creating a social media policy and training your staff on how to use it.

As a baby-step, I recommend entry to social media via LinkedIn and the creation of a marketing plan to simply meet-up with potential sources for referrals. Initially, social media should be used by advisors for social networking and not for the distribution of investment advice or comments about the market, stocks, bonds, etc. I believe that most big banks and wealth management firms know that LinkedIn especially can be hyper-efficient. It exponentially increases an individual's ability to network thus gaining new referral sources and leading to new clients.These firms must create policies for profile building including using SEO for engagement and visibility while incorporating corporate and personal branding standards. Compliance and legal departments must determine how to let employees be social and compliant simultaneously. The interenet is NOT going away. For purposes of this conversation, I will ignore the fact that all of this social interaction is also happening on mobile platforms as well. But that's fodder for another blog post!

LinkedIn can be used successfully and easily even the most restrictive of environments. A greater understanding of the upside will motivate professionals to "experiment" with LinkedIn within their own firm's guidelines if they exist. Most financial advisors have been networking and "linking in" with sources of referrals for years. Now, "linking in" can be done much more effectively and efficiently digitally using LinkedIn. LinkedIn is the easiest of the social media platforms to navigate and you can become productive immediately -- thus, a gateway to social media. It is the most intuitive entry point for social media presence, like a gateway drug. Once you use LinkedIn, you will be addicted and crave more and more "serious" and addictive social media platforms like Twitter!

The "gateway drug" theory has direct application to the world of social media. The gateway drug theory hypothesizes that recreational drugs, like marijuana, which are easier to access and less detrimental to health, usually lead to harder and more serious drugs.

As I am tend to be evangelistic about the power and potential of social media, I realize that I am a "drug-pusher." I am continually encouraging financial services professionals to onboard with LinkedIn as a gateway for more "hard-core" social media. LinkedIn primes people for more and more success using social media for networking and client acquisition.

Most large firms allow advisors to have LinkedIn profiles but the following activities are example of what may be off-limits:

- participating in or initiating group discussions on specific stocks which may be perceived as giving investment advice

- installing applications which may interfere with your firm's own security

- updating your own status may be perceived as disclosing a firm's activities

- sending mass email to connections (CAN-Spam)

- "Liking" something may be perceived as an firm-wide endorsement

Here is what you can generally do via LinkedIn (check with your own compliance dept):

- Build your network of connections. And do it continuously. This means both potential clients and centers of influence. Make this part of your daily routine by adding those people you meet socially and professionally each day.

- Research prospects ahead of meeting them. Learn about employment history, associations, education, etc all of which can help you make a warmer connection to a prospect and increase your client base more quickly and easily.

- Use your LinkedIn network for introductions and referrals. Create a marketing plan around those centers of influence in your network and request introductions to others through your network. Maintaining a strong referral network ensures a pipeline of prospects.

- Join groups for marketing purposes. Compliance Officers don't want advice being given or conversation at the group level. Listen and read what others are commenting on for sentiment and point of view.

Connecting to a variety of LinkedIn groups allows you to dig down deeper to those people who you may not otherwise meet. For those less social, you can ask connections to make introductions to future clients. Joining groups allows for access to view more profiles and add to your existing networks. Imagine learning more about a prospect prior to a meeting. Don't join financial services groups but think outside the box to those who may refer business like others in luxury goods, insurance, etc. Cross-linking in-person marketing efforts with online prospect intelligence will position private bankers and wealth managers to attract, retain more clients and gain greater client wallet share.

Approach your in-house marketing, compliance and legal departments and get trained and get ready. Social media is changing human interaction forever. If firms lack the in-house expertise, they should engage an outside firm to help. The future is here now. Take a bite of the apple and jump on board the social media bandwagon. The full implications of this powerful marketing tool are still not fully recognized as newer platforms and strategies are emerging. Don't be a" Fred Flintstone" instead be a "George Jetson!"

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