Microsoft-LinkedIn deal could boost adviser productivity, expand client base

Advisers who use Microsoft programs can expect new enhancements on the horizon

Jun 13, 2016 @ 1:54 pm

By Alessandra Malito

Microsoft announced Monday it was acquiring professional social networking website LinkedIn for $26.2 billion, a deal that could prove beneficial for financial advisers.

In two separate memos, the chief executives of Microsoft and LinkedIn said the match would emphasize LinkedIn's data of professionals on Microsoft's services, such as the Microsoft Office suite and Microsoft Dynamics, the client relationship management platform. The acquisition pushes the tech giant and social media platform to go beyond connections to exploring trends and targeting their client audiences.

Advisers who use Microsoft programs can expect new enhancements, as executives have already hinted at what could be on the horizon, including a news feed with LinkedIn content and suggestions from the software on experts to work with for tasks. Together, advisers can develop ways to boost productivity, build stronger relationships with clients and prospect for new ones.

"In essence, we can reinvent ways to make professionals more productive while at the same time reinventing selling, marketing and talent management business processes," Satya Nadella, chief executive of Microsoft, said in an email to employees.

LinkedIn chief executive, Jeff Weiner, wrote to his employees about other ideas the executives have for the partnership, including disrupting traditional company communications and giving sponsored content customers reach to Microsoft users.

Mr. Weiner sees the partnership as a way to innovate in areas such as "the corporate directory, company news dissemination, collaboration, productivity tools, distribution of business intelligence and employee voice, etc.,” he wrote.

LinkedIn will remain an independent entity, the companies said.

Two studies from last year, one by Smarsh Inc. and another by Cogent Reports, showed advisers were more actively using social media for professional reasons. Smarsh found 72% of advisers used LinkedIn last year, as opposed to the 39% of advisers who said they used the platform in 2011. Cogent Reports said that of the 74% of advisers it found were using LinkedIn, 59% said it was their primary platform.

The number of advisers using LinkedIn is continuing to grow, too, said Crystal Thies, a self-proclaimed "LinkedIn Ninja" and chief executive of Crystal Clear Buzz.

"The tide is shifting — we are seeing a lot more advisers embracing it," she said. "They are recognizing it as a natural fit for traditional referral marketing."

It's questionable if the pairing will be enough for advisers to move away from their adviser-focused software though, said Kashif Ahmed, president of American Private Wealth.

Take CRMs for example. About 5% of advisers surveyed in the InvestmentNews 2015 Technology Study said they use Microsoft Dynamics for their CRM. This compares to CRM vendors with software designed for advisers, like Redtail, which 27% of the advisers surveyed used, and Junxure, which 26% of advisers reported using.

"I certainly wouldn't get rid of Redtail and go into something far less widely adopted," Mr. Ahmed said. He added other CRM vendors may look into LinkedIn integrations to keep up, however.

LinkedIn has recently drawn attention to connecting professionals with prospects. Earlier this year, the social network rolled out a new feature called ProFinder to help users find experts, including financial advisers. The acquisition could strengthen that mission.

"Advisers are always looking for new ways to connect with investors," said Lorraine Ell, president and director of training at Excellat Consulting. "We are going to have to use it in a way that is more sophisticated than we're accustomed to. It's not just 'Join me on LinkedIn.'"

Of the acquisition, Ms. Ell sees opportunities for advisers.

"This could be very beneficial both in understanding how to reach for an adviser or how to reach a target market, and also to promote their individual advisory business and stay connected in a way that is meaningful," she said.

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