NEW YORK - Social media will alter how investors find and select financial service providers and investment products changing more than just communication and marketing in the wealth management industry said members of a panel discussion on the topic at the Money Management Institutes annual convention Wednesday.
We have the opportunity to think beyond tweeting and posting about how this will fundamentally change products in this industry, said Augie Ray, director of social media strategy for Prudential Financial. Its not just about getting content out we certainly have to do that too but there are a lot of changes coming in the next five years.
Ray said the way Ameriprise is using social media is an example of how social has already changed the industry. Instead of searching for an advisor by typing in a zip code, potential Ameriprise clients can use LinkedIn to find an advisor. Of course, the advisors must be on LinkedIn for this strategy to work, Ray said, but Whats more important? A zip code or being connected through someone you trust?
Beyond the ways social media has enhanced communication, marketing and networking for advisors, some of the biggest changes are yet to come, Ray said. Citing a recent document from interagency body the Federal Financial Institutions Examination Council, Ray said They are looking at things like money transfers within social networks and using social networks for online applications and for matching people with the right products.
Still, many firms continue to grapple with how best to approach social media. At Morgan Stanley, almost 25% of the firms advisors are using social media, said panelist Lauren Wagner Boyman, executive director of online strategy, content and social media for Morgan Stanley Wealth Management.
CONQUERING INITIAL HURDLES
After getting over the compliance hurdle widely regarded as the biggest obstacle to using social media -- the next challenge was getting advisors on board and comfortable with the medium, Boyman told the audience.
Its a time sink up front, she said. You have to sit down with advisors and explain that it does require an initial time commitment.
Eventually advisors will see a payoff as they spend less time putting together seminars that only a few people attend and instead spend a few minutes each day on LinkedIn, she said.
The many anecdotal stories of success with social media may be the best way to gauge how well social media works, panelists agreed. Ray said because social media is not direct marketing, measuring the return on investment doesnt work in the same way. Instead these qualitative successes tell the story.
Advisors need to understand that merely signing up for a LinkedIn or Twitter account is not enough and theres no social media silver bullet, said Boyman. They have to actually use it.