Q: Can agents and advisors use social media for actual client acquisition; and, if so, how?

Amy McIlwain: There is an ongoing debate within the financial industry as to whether social media marketing has a measurable return on investment (ROI).  While there are multiple ways to measure the benefits of social media, it’s just not as simple as looking for a direct sales return on the consumer end, with a social media effort being made on the business marketing end.  Social media is so much more than a marketing tool.

Social media encompasses public relations, customer support, thought leadership, community relations, and much more.  Companies that are making progress in their social activities are seeing comments, interactions, responses and the like.

As a result, they are also seeing business metrics moving: downloads, email registrations, client retention, decreased marketing expenses, increased brand awareness and revenue growth.

For financial professionals utilizing social media, it’s important that they realize how beneficial social media is in building and nurturing relationships. When it comes to selling financial products trust is essential and trust takes time.

This is exactly why it is so difficult to acquire clients directly from social media outlets.

Your goal as an advisor should be to position yourself and your company as an expert in your field by providing content that is of interest or adds value to your clients, insomuch earning their trust and eventually their sale.

Q: But how can you tell if it’s working?

Amy McIlwain: Smart tracking and measuring through online analytics programs will allow you to see the amount of traffic your posts, blogs and content are getting.

If you see some topics getting more hits, comments and interaction than others, change your content strategy to keep your online traffic high.  As a result of increasing traffic numbers and online interaction, you should see your business metrics increase as well.

Aside from measuring the ROI of social media on new clients, you should also see an advantageous effect with your current clients as well.

With the constant interaction and communication that social media enables, customer service will benefit and lead to high customer loyalty.  And we all know what customer loyalty leads to – referrals.  An increase in customer referrals – especially for financial professionals – is key for any business, and adds to that foundation we’ve been talking about.

Question: How difficult is it to measure the ROI?

Amy McIlwain: Financial professionals shouldn’t view social media as the savior to their marketing strategy, but rather as a tool and extension of their offline efforts.  Measuring the ROI of social media is difficult for any business, but for financial professionals especially, it’s a complex web of sales, clients, relationships and more.

Many financial professionals have the jaded perspective that if they set up their social networks and offer their products and services online, people will start buying.  As we discussed earlier, this definitely isn’t the case.

A well-planned foundation, social media strategy and patience are key.  Ultimately, setting goals and understanding the steps necessary to achieve social media success will give financial organizations a better picture of how to measure their social efforts.

About Amy McIlwain President, Financial Social Media, entrepreneur, author, speaker, and worldwide connector, Amy McIlwain is recognized internationally for radical new ways of thinking about Social Media, PR, marketing, advertising, and customer service.

About John Drachman, Senior marketing writer and Series 7 Registered Rep with Alternative Investment Resources, John is also a principal of the creative agency, The Drachman Group, Inc., and is a principal of financial services marketing firm, Advisolocity, and financial automated marketing firm, CaptureTrackConvert.

As going green becomes more of a selling point for tree-hugging capitalists, Barron’s noted recently that a skeptical public is looking beyond public relations to a firm’s real accomplishments.

Going green: From hype to hope

Advisolocity’s D. Bruce Johnston noted that one of the positive virtues of social media networking, for example, is its greenness. “We’d rather use electrons in our posts than chop down another tree and send a piece of paper.”

The stats back this up: 72% of respondents from a recent Mintel study said investors “feel good about working with a financial services firm that invests in companies focused on eco-solutions.”

Nearly 50% of respondents, though, said they are suspicious that many firms are playing the green game to burnish their corporate image. Another 45% said they would like to see institutional investors provide monetary or other  incentives to businesses that take a stake in renewable energies.

Sincerity and action may be the keys to overcoming consumer doubts, the report concluded. More about Mintel’s report, “Green Marketing in Finance 2011,” can be found at Barron’s article on green advertising.

John Drachman, Social Media Memo, can be reached at johan@advisolocity.com

Advisolocity marketing consultant D. Bruce Johnston recently showed the membership of the National Association of Active Investment Managers (NAAIM) how to improve their communications  through a combination of low-cost social media, web site refreshes and better story telling.

“Despite being disrespected by ETF enthusiasts, ignored by fans of index funds and sneered at by proponents of target date funds, the case for active management has never been stronger,” Bruce said.

The Advisolocity/NAAIM presentation, which is now available for download, also takes today’s investment-centric advisors on a guided tour of the best communications practices — and worst hurdles — of web-based client acquisition.

NAAIM defines “active investment management services” as taking an active role in the ongoing process of investment selection and risk management with the objective of improving a portfolio’s risk/reward relationship.

“The 2007-2008 bear market, following on the heels of the 2000‐2002 decline, led many investors to question the wisdom of buy-and-hold investing,” explains Jerry Wagner, a NAAIM founding member.

“NAAIM members have always believed active is better,” he continued. “We support this position through sound research.”

NAAIM was formed in 1989 as a non-profit association of registered investment advisors who provide active money management service to their clients. It includes roughly 200 member firms nationwide, managing an estimated $14 billion. NAAIM’s membership ranges from small regional firms to large national firms with over $1B AUM, including hedge fund managers, mutual fund companies and a variety of other firms that provide professional services to RIAs.

“Advisolocity is a full-service Internet marketing resource dedicated to financial advisors and money managers,” Bruce added. “What distinguishes us most from other agencies is our executive-level understanding of the investment management industry.”

Even in an uncertain recovery, many smaller businesses are committed to expanding their presence, yet have little appetite for going back to business as usual.

The pattern that characterized the emergence from similar market environments in the past is just  not being repeated — and contributing to low levels of hiring.

The cycle of downsizing and staffing up has been altered as executives look to more efficient ways to motivate purchasing behavior through new combinations of technology and communications.

Small is still beautiful

With an open mind, a sense of experimentation, and a relatively small budget when compared to traditional marketing, smaller firms are finding themselves rewarded by fresh attention to their ideas and products through social media initiatives.

Small businesses embrace communications technology

For managers between $25 million and $1 billion in assets under management (AUM), social media marketing and networking offers the prospect of heightened media bandwidth for a lower cost than more traditional advertising programs.

The University of Maryland’s Smith School of Business looked at the relationship between social media and small businesses and found that the technology adoption rates in the U.S. have doubled in the past year from 12% to 24%.

The data, undertaken by the University, is based on a December 2009 telephone survey of 500 small business owners. Adoption rate calculations are compared against a baseline report conducted in December 2008.

The study concludes that nearly one in five small business owners are integrating social media into their business processes — Facebook and LinkedIn were the most popular sites. In fact, 45% of surveyed respondents even believe their social media initiatives will pay off financially in 12 months or less.

Deploy more with less

If you have a small financial services firm, perhaps you have made decisions about adjusting your staffing and business model to the challenges of the current environment. Social media programs provide a way to deploy more resources and effort toward your distribution and marketing efforts without heavy additional costs

This article is a summary of an excerpt from “An Introduction to Social Media: A Guide for Smaller Money Managers.” Authored by R. Jeffrey Young, Huntington Asset Services, and D. Bruce Johnston, Advisolocity, downloadable copies of this report are available at http://www.advisolocity.com/huntington/

Over the past five years, according to Paul Hagen at Forrester Research, there has been a sharp increase in the number of companies that have a single executive leading customer experience efforts across a business unit or an entire company.

Guides like 'Intro to Social Media' Provide Customer Communications Solutions

D. Bruce Johnston, Advisolocity’s president and CEO, says this trend will put additional pressure on asset managers to deploy more resources, if not more individuals, in their customer service area.

“Mostly, the pressure is coming from the banks,” Mr. Johnston said.

Wanted: Customer Attention

“Money managers are finding themselves held to as high a standard as that experienced by customers at many of today’s banks,” he said.

For Customers, Service Is 24/7

The rise of mobile technology, especially  iPads,  “are also conditioning people to expect instant access to information 24/7,” he added.

Customer service initiatives are not unknown in investment distribution, he said. “It’s something asset managers have been trying to teach through value-add programs — to be more sensitive to the clients’ needs,” he said in a recent Hannah Glover article for Ignites. “It’s time for asset managers to apply the same standards to both advisors and investors,” he added.

Johnston co-authored last year’s Introduction to Social Media with R. Jeffrey Young of Huntington Asset Services. “As firms study and adapt to the new world of enhanced customer service, they should not overlook creative and cost-efficient solutions that are close at hand,” he said.

Social media blogs and networks, he added, offer financial marketers a convenient and inexpensive way to provide more service-oriented communications to customers.

By John C. Drachman

From Sugar Land, Texas to Atlanta, Georgia, financial advisors like Curtis A. Smith and Russ Thornton are finding that attracting new business in cyberspace can be as carefree and neighborly as Facebooking friends about the local sports team.

Neighborliness: A Social Media Plus

Advisolocity President and CEO, D. Bruce Johnston interviewed the two professionals recently for a BrightTalk webinar on “Linking Twitter, Facebook and LinkedIn to Maximize Business Growth.”

The two said they have attracted new business to their firms by successfully building out their local presence with social media over the past two years.

For Curtis, the stated goal in the beginning was to achieve a #1 Google page presence for his products and services in the Sugar Land Texas region. “I found that Facebook friending in my community was very important,” he said. By knowing more about a prospect’s background, interests and hobbies, he has been able to achieve more relationship depth faster, he added.

Russ Thornton said, “Social media helps you better identify the people you should be talking to. It also provides you with more information about them to better prepare for a meeting.”

“However,” he added, “It’s important to remember you can’t just stay online. I believe strongly in getting out in the community and meeting people.”

Making client contacts outside of a community is possible, Russ noted, “as long as your client has some flexibility as to how much of their business can be conducted over the phone and online.”

To Bruce’s question about how important maintaining a structured marketing plan was to their efforts, Curtis said, “I don’t need a big, elaborate marketing plan. Social media levels the playing field and creates your presence just by you using it.”

Russ added, “It’s hard to know where to spend your time and money. Social media is proving to be the low cost dynamic way to put yourself out there and raise your profile.”

What about industry colleagues who are not ready to try social media? “They are making a big mistake,” Curtis said.

The SEC is looking for some good reading material from America’s 38,000-plus Registered Investment Advisors.

What's Your Narrative? The SEC Wants To Know

And the story has to be told in “plain English,” a standard that was irrelevant when RIAs could meet their brochure requirements with a simple “check the boxes” protocol.

Now, after 21 years of checking those boxes, investment advisers registered with the SEC will be required by Form ADV-2 to provide new and prospective clients with a brochure explaining the adviser’s qualifications, investment strategies, and business practices.

Deadlines closing in

Newly registered advisers will be required to submit the new Form ADV Part 2 after January 1. Current advisers are required to submit the new form ADV Part 2 with their first fiscal year-end update after December 31. Because many investment advisers’ fiscal years end December 31, that means most — but not all — will be required to file the new form by March 31.

Here are some of the highlights:

• New rules Under the new rules, advisers will have to provide new and prospective clients with narrative brochures that are organized in a consistent, uniform manner
• Disclosures The piece must include disclosures of the adviser’s business practices, fees, conflicts of interest, and disciplinary information
• More information Advisory firms also must provide “brochure supplements” to clients containing information about the employees who will provide the advisory services to that client

Confusion abounds

Investment News reporter Lisa Shidler noted recently that “New Form ADV-2 Adding Costs, Confusion” to the RIA world’s sense of well being. One of those areas for confusion is how to find and deploy the plain English resources necessary to respond to the online questionnaire in a way that is comprehensive and consistent with a firm’s other messaging strategies.

Also, to help clarify some of that confusion, D. Bruce Johnston of Advisolocity recently started a Linkedin group to help guide and answer the tough questions about Form ADV Part 2 compliance.

By John Drachman

Beyond your referral network there is a universe of individuals who are looking for the expertise you practice every day.

Why push? Pull clients in the digital way.

The problem is they don’t know how to connect with you.

Financial social media marketing can help.

If you are seeking out cost-efficient ways to attract new clients, consider leading them to your digital doorway.

Advisolocity’s latest webinar, “Where Social Media Meets Client Acquisition,” can answer questions like these (registration requested):

• What’s the minimum effort required to undertake a social media effort?
• What is the single best social media action you can take to improve client acquisition?
• What are the steps that lead from attracting first-time visitors to converting prospects to clients?

Social networking, participation in blogs and discussion groups are easy for prospects to engage in without having to make a commitment — until they are ready.

Meanwhile, the link between a prospect and a product has a chance to strengthen over time. The decision to receive a message is elective; the prospect has a choice to engage in the communications — or opt out.

To see  how easy-to-use, low-cost social media programs are helping asset managers and advisors stand out in a crowded market, view “Where Social Media Meets Client Acquisition.”

By John C. Drachman, Chief Marketing Officer, Advisolocity

The business-building implications of social media for liquidity-pinched financial services firms are growing larger.

Good-bye half-full glass: Social media makes small budgets look good

For smaller fund managers looking to stand out in a crowded market that is especially good news: Social media’s track record is proving its promise in cost-efficiency when compared to traditional methods.

For example, recent data from marketing firm LederMark Communications underscores the growing popularity of these tools among financial services professionals. According to that survey, up to 40% of all users say that social media strategies are helping them build new business.

While this alone doesn’t prove that all social media strategies have delivered, it does remove one of the barriers to trying a social media effort: social media has been proven to increase business.

A number of investment service providers and publications have been tackling the implications of the growing realization that revenue growth likes social media.

On August 3, Huntington Asset Services, formerly known as Unified Fund Services, will sponsor its first webinar on the topic of Using Social Media to Build Investor Awareness.

Interested investment industry professionals are invited to participate in the webinar by registering here.

In addition to offering some practical guidance on how to use social media, the August 3 webinar also intends to feature insights on regulatory trends and archiving solutions.

Huntington Asset Services will continue to expand its social media marketing focus during its annual client meeting to be held September 12-13 in Indianapolis.

Social media programs create connections between audiences and thought leaders

As a number of the nation’s leading firms adopt a slow, but steady approach to social media strategies, the time may right for other firms to take the initiative.

For example, recent data from marketing firm LederMark Communications underscores the growing popularity of these tools among financial services professionals:

• 85% of those under 50 use social media
• 50% of those over 50 use these cost-effective tools
• Up to 40% of all users say that social media strategies are helping them build new business

Research from Spectrem Consulting Group last spring delivered similar findings:

• 63% of Twitter users read tweets that offer financial advice
• 46% of YouTube users and 41% of Facebook users seek information from social networking investment forums

Social media programs can save time and effort

A number of investment service providers and publications have been tackling the implications of the social media question. Recently, Spectrem Group and Financial Advisor Magazine sponsored a conference that identified a wide range of issues affecting advisors and investors in the shifting wealth management landscape.

This week, Unified Fund Services, a subsidiary of Huntington Bank, announced the sponsorship of a webinar for financial advisors and fund marketers on August 3, called Using Social Media.

As president and chief executive officer of Advisolocity, Mr. Johnston will be a featured speaker at the event.

In addition to offering some practical guidance on how to use social media, the webinar also intends to feature insights on regulatory trends and archiving solutions. Using Social Media is designed to alert up-and-coming money managers and financial advisors to the advantages of implementing low-cost social media marketing programs.

Interested investment industry professionals are invited to participate in the webinar by registering here. In September, Unified will continue to expand its social media marketing focus during its annual client meeting to be held September 12-13.

“Personally,” Mr. Johnston concluded, “I think firms providing timely and accurate portfolio information, articles of interest and thought leadership pieces versus market commentary will distinguish themselves from the rest.”