Vanguard, Fidelity top list of social-media-savvy fund managers

Consultant finds that compliance concern is a ‘crutch' for many

May 23, 2011 @ 1:52 pm

By Jessica Toonkel

+ Zoom

The Vanguard Group Inc. and Fidelity Investments top a list of firms in the asset management industry ranked by how well they use social media.

In a survey conducted by kasina LLC, firms were rated on audience engagement, how well they integrate social media, and their success in developing new and useful content.

In third place is TIAA-CREF, followed by iShares and The Hartford Financial Services Group Inc. These five firms all scored between 77 and 80 points, while the average firm scored 56, according to kasina's Social Media Index.

Asset management firms are rushing to use social media in some shape or form, the kasina study found. While only 48% of managers were using social-media sites last year, this year, more than 80% of firms are doing so.

“However, the vast majority of firms are just dipping their toes in the water,” said Lee Kowarski, a principal at kasina. As a result, there is a big range in the quality of how firms are using these sites, he said.

For example, the leading firms ranked by kasina are using social media to have a dialogue with investors, he said. Vanguard, for instance, asks questions and responds to followers either through Twitter or Facebook.

“It's not surprising that the top firms have their roots in the direct-sales and retail-asset-management business,” Mr. Kowarski said. “Intermediary-sold companies really have to catch up and learn how to properly engage with a mass audience.”

Too often, fund companies blame the compliance constraints for why they can't do more with social media, he said. Firms need to get compliance to sign off on anything they post, generally speaking.

“Compliance is crutch firms are using,” Mr. Kowarski said. “I think the biggest thing holding firms back from using social media to engage investors is inertia.”

To use social media effectively, asset managers need to gain an understanding of how each venue serves its purpose, he said.

“It's not just about posting press releases through your Twitter feed,” Mr. Kowarski said. “It's about having a strategy that really incorporates how the different channels work.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Ed Slott: 3 questions to ask before converting to a Roth IRA

To do a Roth conversion, money has to be spent. Here is what financial advisers and their clients should consider before they incur tax costs, according to Ed Slott, founder of Ed Slott's Elite IRA Advisor Group.

Latest news & opinion

Is LPL's deal sweet enough for NPH's 3,200 reps and advisers?

They will have to decide if the signing package they are being offered by LPL makes sense. A lot is hanging in the balance.

Eduardo Repetto to leave Dimensional Fund Advisors

Gerald O'Reilly, currently co-CIO, will take over as co-CEO with David Butler.

Alternative strategies boomed after crisis, but haven't been tested

Because the S&P 500 has outperformed, convincing clients they need protection is a hard sell.

7 ways advisers fixed clients' biggest financial dilemmas

Sometimes it takes creativity, along with knowledge and outside help, to get a client out of a jam.

LPL Financial buys NPH, a broker-dealer network with 3,200 advisers

The deal, part of which is based on the advisers and revenue that eventually will move from NPH, could potentially cost LPL $448 million.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print