They account for only a minuscule fraction of the world's estimated 100 million bloggers, but financial advisers who maintain their own commentary-oriented websites are finding that blogging can pay.
Blogs can be an inexpensive way to attract prospects, market a practice and communicate with clients, according to advisers. They're also a way to get in front of investors without spending large amounts of cash or time.
“My Internet presence is probably second to word of mouth in terms of attracting clients,” said Rick Kahler, a certified financial planner and president of Kahler Financial Group of Rapid City, S.D., which manages $90 million in assets.
“The blog is fast, efficient, and it allows me to cut costs. I also just think I can do a far better job for my clients in delivering news to them in this manner,” Mr. Kahler said, noting that his blog has replaced the 2,000 newsletters he once regularly mailed to clients.
However, a blog should be more than merely an online brochure; it should be an educational platform to reach clients and potential clients, said Roger Streit, a CFP and principal of the fee-only firm Key Financial Solutions LLC of Livingston, N.J.
“It's kind of a labor of love for me, but I can definitely say that my ranking in search engines has gone way up since I started blogging,” he said.
To be sure, blogs have made it possible for advisers to share videos and charts that provide insight to the market, said Milo Benningfield, a fee-only SEC-registered investment adviser and CFP based in San Francisco, who manages $34 million in assets.
Litman/Gregory Asset Management LLC of Larkspur, Calif., uses its blogs, some of which generate revenue, to communicate with advisers, said Elissa Crowther-Pal, director of the marketing and adviser intelligence unit of the firm, which manages $900 million in assets.
The firm distributes its research to one- and two-person advisory shops that don't have their own research departments and want to use the resources of a larger firm.
A handful of advisers have begun to enliven their blogs with a mix of technologies.
For instance, Bill Schultheis, principal of Soundmark Wealth Management LLC of Kirkland, Wash., hosts an investment show with Carl Richards, a fee-only CFP in Las Vegas, on a talk radio blog.
The free online service they used, BlogTalkRadio.com, requires no downloads and allows subscribers to use their telephone and a computer to host live, call-in talk shows that are archived automatically and made available as podcasts.
The three programs hosted by Mr. Schultheis and Mr. Richards were played 800 times, though the broadcasts weren't advertised.
Robert Klosterman, president and chief executive of White Oaks Wealth Advisors Inc. of Minneapolis, thinks that his blog has counteracted news reports that scared clients away from investing.
“During the time when the news and investor sentiment were at their worst, we found it particularly helpful to share our thoughts on the blog,” said Mr. Klosterman, whose firm manages $200 million in assets.
“It's my voice, it's my presentation,” he said, adding that the presentations he creates provide a good way to explain very complex concepts. The commentaries are left on the blog for investors to play at their leisure. Mr. Schultheis acknowledges the need to present an alternative to the media pundits who were scaring clients.
“We feel there is a tremendous gap — no one is there to introduce an intelligent alternative to Jim Cramer — there needs to be a John Bogle morphed into a Suze Orman, and we're trying to fill that gap,” he said.
A spokesman for CNBC Inc. in Englewood Cliffs, N.J., wrote in an e-mail that Mr. Cramer's advice to investors “was 100% spot on.”
Although neither the Securities and Exchange Commission nor the Financial Industry Regulatory Authority Inc. of New York and Washington have regulations specific to blogging, advisers need to be aware of the range of regulations concerning sales, advertising, fraud and other issues, said Daniel Bernstein, director of professional services with the compliance consulting firm MarketCounsel LLC of Englewood, N.J.
“The two biggest things an adviser must consider when blogging is to know what hat you are wearing [whether broker or adviser] at any given time and to think before you type,” he said.
“People are always careful before they speak and careful before they type a letter and sign it on letterhead. But there's just something about the web that makes people forget their inhibitions,” Mr. Bernstein said.
E-mail Davis D. Janowski at [email protected].
