Nearly 80 percent of the U.S. population uses social media. And that number will continue to rise every year. The opportunities for business here are evident. No matter what industry you’re in, you can be sure that your audience and customers are on social. But compliance issues in regulated sectors such as financial services are enough to give some would-be social media users pause.
How do financial institutions, agents, and brokers use social to generate business without getting into trouble? They can turn to someone like Amy McIlwain, an expert on social media in the financial industry, and Hootsuite’s new global industry principal for financial services.
Author, speaker, and founder of Financial Social Media, McIlwain speaks at financial service events around the world and has appeared on NBC, ABC, CBS, and FOX as a social media expert. She is a regular contributor to InvestmentNews, the Wall Street Journal Online, Huffington Post, and in 2014 was named one of the 24 Most Creative People In Insurance by LifeHealthPro. Her book, The Social Advisor: Social Media Secrets of the Financial Industry, has been a bestseller on Amazon.
We sat down with McIlwain to learn more about her vision for digital transformation in the finance industry.
Q&A with Amy McIlwain
Because of concerns around compliance issues, many financial service companies have been hesitant to use social media. Why is now the right time to overcome that hesitation?
Social media is fundamentally changing the way we communicate and if companies don’t adopt these new technologies, competitors will start to take their market share. Your clients are here, your competitors are here, and if you want to remain relevant in today’s digital world your company needs to be here as well.
In addition to compliance, one of the reasons financial advisors initially held back was the belief that their clients—baby boomers and seniors—were not on social media. But that has clearly changed. Baby boomers are taking to Facebook and Instagram en masse. LinkedIn reported in 2014 that more than 5 million high net worth people in North America were likely to use social media to assist with financial decision-making. If financial advisors want to reach this audience where wealth transfer is occurring, they need to be reaching them through social channels.
It’s also an industry that’s based highly on trust. In order to build trust you need to stay top of mind when money in motion events occur: job changes, retirement, a kid graduating college, or the death of a spouse.
How are the more sophisticated organizations and individuals in the financial services industry using social media effectively?
Companies that are doing well on social media are realizing the power of listening. Social media is a conversation, and you really need to listen first and talk second.
Too often I’ve seen companies jump on social media and start spouting the same monologue they use offline. That’s not going to work. The real value of social media is in the listening and intelligence gathering. So for example, advisors are automatically alerted on LinkedIn whenever a contact is promoted or changes jobs. This provides an opportunity to reach out during critical money in motion events such as 401k rollovers.
Additionally, an advisor who’s savvy on social media could go on LinkedIn, get connected with his clients, and then whenever he has a meeting with that client, he can look and see who else that client also knows and ask for an introduction. It’s a great way to potentially double your referrals with social media. You want to look at LinkedIn like your modern day rolodex.
What are some of the barriers to digital transformation in financial services that we still need to overcome?
Compliance has traditionally been an obstacle for social media adoption in financial services however in recent years technology and education has aided in overcoming this barrier.
FINRA and SEC guidelines categorize social media content into two buckets: static content and interactive content. When it comes to static content, it is considered the same as an advertisement and requires pre-approval by a principal of the agency. Interactive content, on the other hand, is considered the same as a presentation in front of a live group of investors. Interactive content does not require pre-approval, but it does require archiving and post-review. The majority of social media posts and discussions will fall into the interactive category—but check with your compliance department for specific firm rules.
With the advancement of technology, more and more firms are moving from pre-review to post-review for the majority of social media content. Tools like Hootsuite, in conjunction with our compliance partners, are able to provide pre-publishing guardrails such as flagging and rerouting posts containing words such as “guarantee” or “free” before posts even go live. And Hootsuite’s internationally recognized education program provides industry specific training that not only increases advisor adoption, but provides the foundation for FINRA and SEC compliance requirements.
What social media trends do you think financial services organizations need to get ahead of in 2016?
Empowering a social enterprise is a big one. Realizing that it’s not just the company having a voice, it’s empowering executives and employees as brand ambassadors—getting the CEO and the faces of the organization to start blogging. Have them establish a presence on Twitter and LinkedIn. Get them active on social and humanize the brand.
Social media is an opportunity to turn strangers into consumers of your content, build trust, and ultimately gain clients and create brand advocates.
What advice do you have for financial organizations or individuals who want to use social media to grow and engage their audience?
Again, education is key. You can’t just launch a software tool and expect adoption. It’s something that advisors need to learn. And the deeper their understanding the more they’re going to realize this is a shortcut that saves time rather than one extra thing on their plate.
It’s also about setting the right mindset for engaging on social media. The product sale isn’t happening on social media, but as an advisor you’re earning the right for a phone call—for a meeting. So you need to stop measuring social media in terms of “The ROI that I got was X amount of dollars of new assets under management.” Think about your goals being, “Alright, this week I’m going to have five phone calls as a result of somebody I met on LinkedIn.” It’s those phone calls and meetings that will lead to increased revenue.
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The post How the Financial Industry Can Embrace Social Media and Remain Compliant appeared first on Hootsuite Social Media Management.
from Hootsuite Social Media Management https://blog.hootsuite.com/financial-industry-social-media/