Social media: Look before leaping

It's an exciting time in our industry as we move into the era of social communications and online networking
AUG 16, 2011
It's an exciting time in our industry as we move into the era of social communications and online networking. The idea of accelerating relationships and connecting with clients, prospects and strategic alliances in new ways is both appealing and promising. Recently, one of the largest wirehouse firms decided to give the green light to social media (albeit limited access), and more are sure to follow. Yet it seems that we may be getting ahead of ourselves. I've seen hundreds of how-to articles for capitalizing on social media to build business but very little coverage in the areas of planning, education and preparation. Social networking is a marathon, not a sprint, and it takes serious daily commitment to build any kind of community and present yourself as a highly skilled networker and leader. Success is measured not by return on investment but by return on relationships. If you want to get this right, it's time to start focusing on social-media education and training. Know the environment. Social media is a giant conglomeration of multiple, virtual and perpetual online networking events. When you enter into any one of these events, it is imperative to understand the type of event (professional, business or casual?), the context of the event (what are people discussing?) and the human behavior associated with the event (what are the rules?). You don't want to be the person who enters a conversation unannounced and out of place; it can damage your reputation quickly and permanently. Locate the conversations that you want to be a part of, and think before you participate. Choose an identity. It's human nature to cast a wide net in the hope of attempting to capitalize on every potential business opportunity, but it's not effective in social networking. If you don't have a niche focus, it will be slow going trying to build relationships via social networking. Deciding who you are going to be and how you will present yourself online will drive where and how you engage, with whom you engage and what you deliver to your following. What makes you different from all of the other financial advisers out there? Hint: It's not your investment strategy. What's your story, and what are your personal passions and interests? What are your charitable and community endeavors? Ultimately, you should strive to be human and be yourself. Develop a plan. Once you've determined who you are going to be, it's time to lay out your strategy for how you will build your community, or “trusted network,” what your time commitment will be and how you ultimately will create and add value to your following to expand influence. Social networking is a tremendous commitment. In order to build and accelerate relationships, you have to spend a lot of time giving without any immediate gratification. You need to put together a plan, block out time and be disciplined about this process.  Protect yourself. It seems that protecting oneself would be a given in a regulated industry, but there are still many financial advisers utilizing social media who do not have the proper safeguards in place. You need two key components: A well-written social-media policy that everyone on your team or staff clearly understands and a compliance-archiving solution for record-keeping purposes. Make sure that you clearly understand your firm's rules and policies. In addition, you should follow best practices such as not allowing testimonials on your profiles or pages, getting approval in advance for advertising (and blog posts which are considered advertising), not making any specific recommendations, and having proper disclaimers and disclosures. Find, follow and study the influencers. The people who are having the most success in building a community around their ideas are those who have something of value to share, and simultaneously practice the art of eliminating self-interest. There are influencers, leaders and coaches everywhere from whom you can learn. Social networking can be deceptive in that it may seem simple enough and it's free, but really it's neither. Look for professionals who have what I call “social proof.” Do they have a decent following or community? Do they blog? Have they been at it for a while? Do they seem to be engaging effectively? Are they staying away from self-promotion? As social technologies continue to infiltrate and enhance human relationships, we must be ever so careful in building and preserving the trust of our clients and prospective clients. Stephanie Sammons at [email protected] is founder and chief executive of Wired Advisor, which provides social-media marketing solutions for financial advisers and firms.

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