Michael Kitces #FinTech

Finect: They have built it (more or less). Will advisers come?

There is a new wrinkle, a new subspecies really, in the social-media network realm as it relates to financial services

May 1, 2013 @ 3:34 pm

By Davis Janowski

I really want to like Finect, the new social-media network that was launched into open beta Tuesday.

In an overly simplified nutshell, it purports to be an open, inherently compliant social network for the financial services industry and its constituents.

That includes advisers, product companies, broker-dealers, all their ilk and relatives and, of course, end clients.

Again, in an overly simplified explanation, the network is meant for you, the adviser, to share with and connect to your clients in a secure, compliant, archived environment with analytics tools on the back end that eventually will allow rich examination and analysis of traffic and the parties on it.

And that is the key: Getting a critical mass of large users.

Right now, Finect needs advisers a lot more than advisers need Finect — that is if advisers already are in a social media comfort zone (see below).

Origins

I met and spoke with the service's president, Jennifer Openshaw, on a few occasions over the past few months while the site was in closed beta status.

She is a smart, savvy pitchwoman and successful author who is quite comfortable on the financial news talk show circuit.

And she talks a very good game in person and sells Finect quite passionately. I was almost totally convinced after our last meeting.

But I have ruminated a bit and spent a little time on the site since then, and for now I remain a bit skeptical.

Social networking is useful to journalists, too: I have taken the opportunity to connect with many of the organization's principal executives and staff members on LinkedIn and on Finect itself. The majority are veterans of the Spanish banking industry and many of its engineers are from Spain as well.

It appears that many of its core features are well-fleshed-out.

In fact, from a design and functionality standpoint, it does not seem like something in beta at all. You seldom encounter an "under construction" message.

Comfort zone

It will only take a few minutes for someone comfortable on social-media networks to get a feel for it, but it is not perfect (more on that in a moment).

A mix of a dozen industry consultants and various competitors have said to me — off the record — they think it is conventional looking. A few even called it a rehash or redundant. However, I remain more open-minded about its potential.

Upon hearing about it months ago, my initial thoughts were "Do we really need another social network?” and “How does it differ from LinkedFA?" (the latter being another self-proclaimed compliant open social network, but one I could not get excited about a few years ago).

Rather than a distinctly separate social network, I see Finect as another layer on the social-media onion. Now I should qualify what I mean by that.

For those advisers out there who already are comfortable with the big three social-media services and networks — I am, of course, referring to Facebook, LinkedIn and Twitter — Finect is going to seem a bit of an add-on that many will have difficulty justifying spending additional time learning.

After all, the social-media conundrum has been solved by a number of archiving and pre- and post-review services and applications over the last four years.

In that sense, broker-dealers and their advisers who have already invested in such solutions as Actiance Socialite, Arkovi (now part of RegEd), Erado, Hearsay Social, Smarsh and Socialware or the like are not going to get it.

Similarly, registered investment advisers, brokers affiliated with an independent broker-dealer, or pure planners who have invested in such a solution or had a lot of training from the burgeoning number of social-media experts, consultants and coaches are also going to find it redundant.

Where Finect might find a home for itself and its services is among breakaways who want a one-stop social-media stop. It remains to be seen whether that population will be big enough or quick enough to grow to keep Finect afloat and then a must-be-on-there-destination.

I first and foremost consider myself an advocate for advisers.

And so, I always try to pose their usual first question to myself when it comes to a new service or application: “Tell me, Davis, why do I need it? What problem is it solving for me?”

And the answer is that if you want to interject a layer that can be used as a new jumping-off place for your existent connections on the three main networks and a place to grab somewhat-vetted content (deemed by its creators to be compliant with Finra and SEC regulations) and share it this could be a good place for you.

A basic presence on the site is free for advisers and is enough for you to dip your toes in and start to learn its ways.

However, to get access to all its features in the future, the price will be in the neighborhood of $2,500 per year [FOR institutional users].

[Finect president Jennifer Openshaw wrote me to say that the above cost is incorrect, that price is for institutional-level users. And therefore the following few sentences in the passage are also incorrect] Yes I can hear it already from dozens of advisers with whom I regularly interact: “$2,500!”

For now, advisers signing up during the open beta period can get full access to premium features for a year. Not a bad deal and a good way to drive lots of advisers to the site.

But once you are hooked, you'll pay for it next year.

CORRECTION AND CLARIFICATION

"I wanted to correct that we are free," wrote Ms. Openshaw in an e-mail Thursday (the story was published Wednesday)..

"The $2,500 refers to our institutional pricing, which is not set in stone. The key thing is that we are open and we are free. Free gets you a lot: Online presence with verification, one-stop social media [meaning being able to control your Facebook, LinkedIn and Twitter presences from within Finect in addition to your own content published and shared from within Finect with clients or prospect connections], basic groups and basic compliance," she continued..

"It all boils down to what level of features you are seeking. Like number of groups, number of in-mails, the latter is similar to LinkedIn in that regard. So an individual could very likely stay in the free [feature set level, akin to the basic level on LinkedIn] like many LinkedIn users do. As features are built, they might be added to the different levels," wrote Ms. Openshaw.

It looks good but is still in beta

As I said, Finect looks and feels fairly complete from an overall design and usability perspective but it is not yet perfect, which should not be expected.

That said, I will provide you with one example that leapt out at me after just a few minutes on the site a couple weeks ago: A not-so-obvious inbox.

Those who know me know I gravitate toward simple and straightforward when it comes to web design and that, for example, I am known for hating the interface of Facebook. I have never found it intuitive or very sensible to navigate. But how can hundreds of millions be wrong?

Anyway, so well-trained am I at social media and navigating all sorts interfaces that I often expect a big, honking, obvious inbox.

I looked and looked for one at what I thought might be obvious spots.

Turned out it was in a rather obvious spot in the upper-right-hand corner, but hidden under a tiny triangular divot of a dropdown menu. There you find the settings, invitations, inbox and logout choices.

I may not be the sharpest knife in the drawer, but I have done this long enough to know that if it is not obvious to me, it will not be obvious to an awful lot of others. It's just the sort of thing that might also trip up the uninitiated adviser.

Again, however, I'm trying to remain open-minded about this for a time and simply share what I think. Perhaps a groundswell of advisers are going to gravitate to it straight away. I will share more as I learn more.

For more information, visit Finect online.

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