The first question advisers often ask me is, “What exactly can I do with social media?” While the compliance constraints everyone talks about are real, there are a number of strategies you can implement that will have a tremendous effect on your bottom line.
Let's begin by tackling the compliance issue head-on. The Financial Industry Regulatory Authority Inc. and the broker-dealers it oversees continue to grapple with how best to allow registered representatives to use social media while still protecting the interests of current and prospective clients.
Finra has been looking into social media for quite some time, and this year has begun to include electronic communications and social media among its list of topics of heightened importance.
That has engendered a lot of fear and worry on the part of registered personnel and broker-dealers. When we look at Finra's Regulatory Notice 10-06, the guidelines are concerned primarily with two things — “that investors are protected from false or misleading claims and representations,” and “that firms are able to effectively and appropriately supervise their associated persons' participation in these sites.”
(Before you start, be sure to review Finra's “Guide to the Internet for Registered Representatives,” which provides information on the supervision of various types of electronic communications. Also familiarize yourself with
Regulatory Notice 10-06, in which Finra provides guidance on the use of social-networking sites.)
Here's the bottom line: Advisers can use social media in their practices, as long as they do so within the guidelines of their firm and always keeping the best interests of the public in mind.
So how should advisers do that?
We all know that an adviser's business is built on relationships. And the best way to build a business of relationships is through networking and referrals. An online presence gives an adviser access to prospective clients that he or she otherwise would not have.
BETTER INTRODUCTIONS
Social-media tools, and particularly LinkedIn, which appeals to a business audience more than some of the other social media, offer the ability to search for individuals who fit our target markets. They then show us precisely who in our network can make an introduction to that person.
This is targeted prospecting at its best, and it provides a powerful way to go about building an advisory business.
Understandably, given compliance concerns and the loosey-goosey nature of social media, veteran financial advisers typically are hesitant to embrace this (somewhat) new medium.
Yet most advisers understand that the key to building their business is to attract new clients while keeping current clients engaged and happy.
Any thorough social-media strategy should incorporate the following seven components:
• A clear understanding of your firm's social-media policy. If your broker-dealer has not yet implemented a policy, encourage it to seek help in doing so.
• A compelling profile of yourself that is compliant, reader-friendly and highlights what sets you apart as an adviser.
• A robust database of connections — clients, centers of influence, and professional and industry contacts.
• Clearly defined target markets that are as specific as possible, whether the niche is an industry, occupation, income or ethnic group, or geographic location.
• Targeted research so that you are aware of, and prepared to ask for introductions to, the individuals in your target markets that your clients have included in their networks.
• Regular status updates to share compelling information with your connections — and to keep your name and face in front of them. A number of broker-dealers prepare “preapproved” updates for their advisers.
• A scheduled time each week (30 minutes is typically sufficient) to continue building new connections and to enhance relationships with existing ones.
The seven components are equally important.
But the single act that will catapult your business to new heights is asking for referrals to the targeted individuals you want to meet.
The good news is that there are millions of people using social media who are waiting to meet you. All you have to do is set up your social-media presence, do the research and ask for the introduction.
Kristin Andree, a former registered representative, is president of Andree Media & Consulting, which helps advisers and their firms with social media, marketing and client retention. She can be reached at [email protected]
