Financial advisers push boundaries of social media

One day on Facebook, Tina Powell discovered a client’s son was in the hospital because of epilepsy. Ms. Powell, a partner at registered investment advisory firm Beacon Wealth Management, said she picked up the phone to see if she needed any support, a proactive move that helped lift an emotional burden while deepening their relationship.

“Financial planning is really about life events,” said Ms. Powell. “Every day I’m going onto Facebook.”

The client with the epileptic son had already been reviewing the family’s medical insurance because her husband was on strike, according to Ms. Powell, who said the hospital visit complicated the situation. They wanted to ensure their son would continue receiving care under the same doctors.

“It really required some in-depth analysis and a lot of consideration,” she said.

RIA firms like Beacon, as well as larger wirehouses such as Wells Fargo and Morgan Stanley, are seeking to harness the power of social media more than ever before while treading carefully to keep within regulatory requirements. It’s a way for advisers to stay on top of any professional and personal developments in their clients’ lives that may require special financial attention.

Wells Fargo & Co.’s brokerage unit is testing Facebook for its social media program, which currently offers the opportunity to create LinkedIn and Twitter profiles to boost business, according to Chris Diskin, a digital marketing manager who leads the program for financial advisers.

Wells Fargo estimates it could have 3,000 advisers in its social media program by the end of this year, compared with more than 1,700 participating now, according to Mr. Diskin. The initiative got started in 2012 in response to “large demand from the field” before being rolled out last year, he said.

The firm’s brokerage business, which has about 15,000 advisers in total, is looking at ways to expand its social media offering while providing training for those who are interested in what’s already been tested and cleared by compliance.

“We’re testing Facebook right now in proof of concept,” said Mr. Diskin. Facebook is getting “really smart” targeting people with information, allowing people to pay to have the content shown to a particular audience.

Many of Wells Fargo’s financial advisers already have personal accounts, he said, and “they want to take it to the next level and start using it for business.”

That’s not all. Professional networking company LinkedIn Corp., which agreed this month to be bought by Microsoft Corp. for $26.2 billion, has a business tool called Sales Navigator that Wells Fargo has been exploring under a pilot program, according to Mr. Diskin.

It’s been most popular with younger advisers who are starting out and trying to build their books, he said, as it helps them target people they want to do business with and gain introductions through their existing networks.

“It’s really changed the game in terms of cold calling,” said Mr. Diskin.

Wells Fargo sees social media as productive way of capturing the attention of existing and prospective clients who may not be opening each and every email they receive, according to Mr. Diskin, who said advisers active on social media are outperforming in picking up new clients and net new money.

“We do see a lift there,” he said.

Wells Fargo uses Socialware to capture and archive messages that advisers share over Twitter and LinkedIn, as well as to block any that may be inappropriate, according to Mr. Diskin. To set up a social media profile at Wells Fargo, financial advisers need approval from a local supervisor as well as the firm’s compliance department. They then have access to a library with about 300 pieces of pre-approved material that’s continually updated with about 50 new pieces of business and life event planning content each week, including topics such as retirement, education and estate planning, Mr. Diskin said.

They might share money tips with clients who’ve just gotten married, for example, or the top 10 golf courses in America.

“Advisers should be authentic and use their own voice,” he said. “We give them a crutch with the pre-approved library.”

Tweeting content outside of the library, and in their own voice, does require approval from a local supervisor, which typically takes about four hours, according to Emily Acquisto, a spokeswoman for the firm. Managers have up to 24 hours to approve social messaging under the firm’s policy, she said.

Morgan Stanley’s wealth-management unit has been using social media since 2012, according to spokeswoman Christine Jockle.

An internal study done last year at Morgan Stanley showed that 46% of its advisers who use social media used it to connect with their clients’ children and grandchildren. And 57% reported bringing in new assets through their social media engagement.

Morgan Stanley has some restrictions in place for financial advisers who use Twitter and LinkedIn, and their profiles must be approved, according to Ms. Jockle. Certain features are off limits, such as making recommendations and endorsements, she said.

Compliance is an important aspect of in social media that firms need to manage.

Ms. Powell is cautious when sharing material, keeping an editorial content provider checklist and treading carefully in terms of marketing. “I know what it’s like to go through an audit,” she said. “We’ve never promised any performance.”

It’s important to keep track of what’s being shared and to have the ability to export communication details into a file that may be easily reviewed by regulators, according to Ms. Powell, who’s also the founder of SheCapital, an online investment platform for women.

“We behave like a big firm,” she said. “I basically have a running archive of everything we’re doing.”

Ms. Powell programs six or seven tweets to be sent out each day based on what’s happening in the news.

“We kind of know when the big news is coming,” she said, citing events tied to the Federal Reserve, or the “Brexit” vote on Thursday that will determine whether the United Kingdom will leave the European Union.

“We’re keeping an eye on it,” she said, adding that she has a compliance mindset and doesn’t require special approval to share thoughts beyond programmed tweets.

Ms. Powell is also measuring the success of her social sharing with the help of Hubspot. “We’re looking at it through an analytic lens,” she said, adding that she wants to know the best time of day to engage her clients as well as how many clicks she receives on a particular topic.