shoefitts marketing - best practices for financial ... · despite early predictions, social media...

Best Practices for Social Media Rollout

©2014 ShoeFitts Marketing | 4110 SE Hawthorne Boulevard, #209. Portland, Oregon 97214 | shoefitts.com

Best Practices for Financial Services Firms: Rolling Out a Social Media Policy

A ShoeFitts Marketing White Paper


©2014 ShoeFitts Marketing

Executive Summary Despite its youth, social media is now a common everyday practice and often encompasses several platforms. No longer just a tool for teens or tech nerds, social media use is wide-spread among all ages and demographics. Social media networking also goes far beyond personal use and is now an integral and fundamental part of business marketing and client interaction. Companies that don’t embrace social media risk falling behind the times and losing business to competitors.

Social media does have risks, however, particularly for the financial services industry where concerns about compliance and regulation are very real. FINRA Regulatory Notice 10-06 clearly states financial services firms and broker-dealers must implement a social media policy for advisors before they can use networking sites. The policy must include written documentation, training, archiving, and monitoring.

In many instances, advisors are the ones pushing for a social media policy. They realize their people-centric industry makes social media a necessity for relationship-building, prospecting, and thought leadership.

Whether the impetus comes from advisors, marketing, or competitive pressure, financial services firms cannot ignore the importance of developing a social media policy.

ABOUT THIS WHITE PAPER This research and information presents financial services firms with an overview for rolling out a social media policy to advisors. The material addresses the growing popularity of social media and its integral role in marketing strategies, along with tips for social media policy development, training and rollout, advanced training, and future social media considerations.

Growth of Social Media Use and Marketing PLATFORMS Despite early predictions, social media is now firmly entrenched in modern society and its influence continues to grow every year. Teens and the early handful of social media mavericks are no longer alone. Today, some 73 percent of online adults use social media, according to a recent study by the Pew Research Center.i

Nearly half of these online adults use multiple social networking sites. Facebook remains the dominant player with 71 percent of online adults using the site, up from 67 percent of online adults in 2012. Other key social media sites include LinkedIn, Twitter, Pinterest and Instagram, which are all experiencing growth as well.



The Pew report shows LinkedIn is the second favorite adult choice after Facebook, with 22 percent of online adults now engaging in the professional networking site. Interestingly LinkedIn, with 300 million members, is the only social media site favored by more people ages 50-64 than ages 18-29. LinkedIn is also more popular with college educated adults and those with an annual household income of $75,000 or more.

According to a study by Spectrem’s Millionaire Corner, almost two-thirds of investors over age 65 have social media accounts with favorites including Facebook, LinkedIn and YouTube.ii

Access to social media sites is no longer limited to standard desktop computer and laptop users. Tablets and smart phones now let even more people network from anywhere, anytime. In the mobile world alone, the Pew study found over 40 percent of cell phone owners use social media sites, and over a quarter of owners engage daily.

Social media extends beyond the big five platforms to include YouTube, Tumblr, Google+, WhatsApp, LINE, and WeChat. Regional and national sites are also becoming popular.

Growing access avenues, new sites, and evolving features indicate the social media stratosphere is evolving, not fading into oblivion. Likewise, businesses continue to realize the importance of social media participation and the necessity for a clearly defined strategy.

INTEGRAL PART OF BUSINESS AND MARKETING STRATEGY Gone are the days of outbound marketing. Businesses can no longer push heavy sales-oriented messages and expect potential customers and clients to respond. Unwanted emails, posts, phone calls, and ads can be easily dismissed and trashed.

Instead, marketing is now permission-based and requires a conversation; a sharing of information, resources, and knowledge. No place is this more important than in the financial services industry where so much business relies on networking and trust-building.

Social media sites are vital in creating this new environment. However, they are not a stand-alone solution. Instead, social media must be an integral part of a complete marketing strategy and digital approach.

Advisors must first understand the issues and concerns of their current and prospective clients, and shape their interaction and messaging accordingly. With a sound strategy, advisors can then strengthen relationships, engage current clients, and connect with prospects, and in turn, grow practices.



The role of social media is proving particularly critical in generating marketing exposure and lead generation, according to the 2013 Social Media Marketing Industry Report by Social Media Today.iii The study also indicates social media is especially helpful in gaining marketplace intelligence and developing a loyal following.

Forbes contributor Drew Hendricks notes in a recent post: “As social media continues to influence everything businesses do, everyone from the CEO to the new summer intern will need to realize the part it plays in day-to-day duties. Those professionals will be forced to keep up or be left behind.”iv

A study by FTI Consulting and LinkedIn further highlights the impact in the financial services industry:

“Among financial advisors in particular, social media has quickly become a critical business tool. With a business that is fueled principally by networking, advisors are increasingly integrating social media as a core element of their marketing efforts.

“Social media presents a dynamic and multi-faceted channel for financial advisors, whose business relies on networks and referrals to win and retain clients.”v

Social Network Use by Business Purpose (among financial advisors who use at least one social network for business) as supplied by the FTI Consulting and LinkedIn report.



At the same time, the Smarsh 2014 Electronic Communications Compliance Survey Report showed that 80 percent of survey respondents agree that message supervision is more complex today than ever before. For the fourth year in a row, new communication channels (including social media) remain a concern with electronic message compliance.

The survey also revealed that advisors are driving adoption. According to respondents, LinkedIn remains the most highly requested electronic messaging channel by employees, followed by instant messaging, text/SMS messaging and Twitter. Organizational requests to allow new channels overwhelmingly come from financial advisors.

Social Media Policy Development COMPLIANCE AND REGULATORY CONCERNS Despite the growing popularity of social media and its marketing importance, many financial services firms have been slow to embrace the technology tool and provide guidance to their advisors. The number one reason: compliance concerns.

While the risk of non-compliance with the laws and regulations laid out by FINRA are very real, there is a greater risk of “becoming irrelevant if your organization and its field staff are not socially literate, and effective and engaged social networkers,” explains Jay Palter in his blog, Philosophizing.vi

In short, FINRA Regulatory Notice 10-06 states:

“Firms must adopt policies and procedures reasonably designed to ensure that their associated persons who participate in social media sites for business purposes are appropriately supervised, have the necessary training and background to engage in such activities, and do not present undue risks to investors.

Firms must have a general policy prohibiting any associated person from engaging in business communications in a social media site that is not subject to the firm’s supervision. Firms also must require that only those associated persons who have received appropriate training on the firm’s policies and procedures regarding interactive electronic communications may engage in such communications.”vii

To meet these rules, firms must create the following before advisors can engage in social networking:

• Written social media policy

• Method for capturing and archiving posts and tweets

• Monitoring of posts and tweets

Compliance and legal must take a strong lead in setting forth the governing rules and regulations surrounding social media, but it is equally important for sales and marketing to play an integral role.



The financial services firm The Principal Financial Group used an integrated approach and plan when it was time to set up social media governance and policies.

“Before we even started we sat down with our compliance team and talked about what we were trying to do and really involved them in the process,’’ says Luke Vandermillen, Vice President of the Principal Financial Group. “There was just a spirit of partnership and collaboration from the word ‘go’ with our compliance team and that made all the difference in the world.”

For more on The Principal’s social media rollout see the Social Spotlight at the end of this document.

DOCUMENTATION A social media policy guideline must clearly define the firm’s compliance and regulatory requirements and best practices. Key components of the policy should include:

• Role of social media within the context of the firm’s marketing strategy

• Acceptable social media sites

• Permitted and prohibited activities

• Information about the difference between static and interactive content, and which requires prior compliance approval

• Compliance and regulatory requirements

• Information about enrollment in archiving and monitoring services

• Training requirements

• Where to go for questions and help

ARCHIVING AND MONITORING Several companies offer archiving and monitoring services for financial services firms. To meet FINRA requirements the services should provide a number of key features offered ‘out of the box’. These include:

• Support for multiple electronic communications platforms and content types

• Web-based 24/7 archive availability for administrators

• Search capabilities by sender, recipient, subject, date or message content

• Efficient review and supervision

• Full website capture and archiving

• Security measures to maintain control and ownership of the data



INTRODUCING SOCIAL MEDIA TO ADVISORS Like many new programs, firms can ease into social media training by starting with a pilot group of advisors. An easy step is to start with advisors who have already expressed an interest in using social media.

Financial services firm Securities America experienced this type of social media impetus from its advisors. “The initial push was by our younger advisors who said ‘I want to be able to do this,’” explains Laurie Burkhard, Senior Business Consultant for Securities America.

The nation’s largest independent broker-dealer, LPL Financial, faced a similar scenario. “We have a handful of advisors who are true advocates of social media and digital marketing, and they truly knew the value of it and wanted to get on board,” explains Alan Eisenberg, Vice President of Advisor and Sponsor Engagement at LPL.

Burkhard agrees that support and participation from all levels of management is also an important step toward building momentum and participation.

TRAINING AND ROLLOUT Videos, seminars, and boot camps are all great ways to launch social media training. With any or all methods, firms should include the following:

• The importance of social media

• Role of social media in marketing strategy

• Social media compliance rules

• Archiving requirements and how to register with the chosen archiving vendor

• Check list of dos and don’ts

• How to get started

• Photographer to take professional yet approachable advisor profile photos

Securities America began with LinkedIn training and an understanding of the differences between profiles and resumes. “We tell advisors their profiles need to demonstrate why a client should care about connecting with them,” says Burkhard. “We help them dip their toe in the water by starting with static profiles and then show advisors how to be thought-leaders.”

LPL took a similar approach. “Once we started to allow our advisors to use social media, interest just took off,’’ says Eisenberg, whose firm was one of the first to allow social media. The initial rollout centered on the rules, requirements, guidelines and how-to-get-started steps.

LPL advisors were required to watch a 20-minute training video, which captured each advisor rep number on the back-end so the firm could track participants. The launch also included best practices for setting up Facebook, LinkedIn, and Twitter, and required advisors to apply the firm’s chosen archiving and monitoring application with any social media sites they set up.



Although the company is greatly expanding its social media support, Eisenberg says early training with beginners still needs to outline the differences between interactive and static content. Before advisors go live with static content, Eisenberg says compliance requires a profile review to make sure the descriptions, copy, disclosures, and things advisors say about themselves are all in place. Advisor-created videos, blogs, or extensive copy also require compliance review.

Interactive content does not require compliance review and includes sharing third-party content. Eisenberg says some advisors fear they will post the wrong thing, but he reminds them, “Use the same guidelines with social media that you’ve been using for years with your normal advertising: you cannot make promises; you cannot talk about rates of return; and you don’t want to recommend a product or solutions.”

Ongoing Support and Future Growth

TRAINING AND CONTENT ENHANCEMENTS As advisors become more adept and comfortable with social media participation, and realize the inherent benefits, many will want more in-depth training. For example, Securities America provides advisors with content libraries and websites devoted entirely to social media.

Burkhard says all company conferences include social media training and its role in branding. “The initial years were about how to use social media; now we have moved past that to cover best practices.”

LPL promotes social media through workshops, events and conference break-out sessions, and the company posts articles through its electronic publications. Burkhard also says social media training needs to address different audiences: beginners, mid-range participants, and more experienced advisors.

Social media engagement can be time consuming, so Burkhard strongly advises advisors to use the firms’ content libraries or share other reputable news sources. Advisors can add their thought-leadership to educational articles, economic news, and changes in government regulation. Helpful ready-made online content that can be retweeted or shared may include:

• Industry-related articles

• Videos

• Infographics

• Tips

Firms must commit to social media and provide the necessary support to advisors, while advisors must realize it’s not a ‘one-and-done’ process.



REGULATORY AND PLATFORM CHANGES With an evolving landscape, social network platform changes are inevitable. Existing social media sites continue to tweak features and settings, so close monitoring of the personal setting options is particularly important in order to preserve compliance.

Likewise, social media sites are focusing much more on visuals, so the popularity of once relatively unknown photo- and video-oriented platforms are growing and new sites are still coming to market. In the past, these sites and tools were prohibited, but new Web archiving tools and specialized web platforms (designed just for advisors) allow firms to take advantage of the latest tools while maintaining regulatory compliance.

Regulatory changes also keep advisors on their toes and constantly adjusting to new guidance. For example, the Securities and Exchange Commission (SEC) recently issued new social media guidance for advisors, noting how advisors can feature public commentary about themselves or their business without violating the Investment Advisers Act and its testimonial prohibition.

The 74-year-old Advisers Act did not account for Facebook, LinkedIn or Twitter. The updated guidance clarifies that if comments about an advisor’s firm appear on independent, third-party social media sites, the firm can promote them under specific circumstances. In some scenarios, SEC-registered advisors can steer prospects to those comments and testimonials—provided the advisor didn’t encourage clients to post social media or web comments; didn’t write the comments under an alias to hide the reviewer’s true identity; and publishes the entire body of comments—without filtering negative comments.

The new guidance seeks to help advisors develop compliance policies and procedures that are reasonably designed to address social media participation, specifically with respect to the publication of any comments that are considered testimonials.

In addition, the SEC recently approved FINRA’s new, consolidated rules addressing required supervision systems and responsibilities, written supervisory procedures, supervision of supervisory personnel, office inspections and other related requirements.

Regulatory Notice 14–10 includes new rules 3110, 3120, 3150 and 3170, which replace NASD Rules 3010, 3012 and 3110(i). The new rules will become effective on December 1, 2014, and essentially consolidate and codify existing guidance already in place.



About ShoeFitts Marketing ShoeFitts Marketing helps clients be unforgettable. The Portland, Oregon-based company is a consulting organization at heart, drawing on decades of experience in the financial services marketplace to identify, create, and implement inspired marketing and social media strategies and solutions for its clients. ShoeFitts collaborates with people who recognize the need to differentiate in the vastly commoditized landscape of the financial services marketplace− focusing on financial service organizations of all types from Broker/Dealers to advisors, mutual fund organizations, recordkeeping platforms and beyond.

As a training partner, ShoeFitts Marketing translates social media, branding, generational issues, business strategy and marketing into manageable steps for clients, their teams and advisors. As an industry partner, ShoeFitts Marketing brings fresh content, strategy and engagement ideas to help clients win and nurture more profitable business. Whether clients come to ShoeFitts to learn new techniques or choose customizable programs, the company makes the experience and outcomes unforgettable. For more information visit www.shoefitts.com, follow @missfitts on Twitter, connect on LinkedIn and like ShoeFitts on Facebook at http://www.facebook.com/shoefitts



The search for a unique way to communicate with wholesalers and financial advisors led Principal Financial Group (The Principal) to implement a social media policy focused exclusively on a disciplined approach to Twitter.

“We looked at the way we shared information with our sales and services teams and realized it was just too much; it was very difficult for people to keep up,” explains Luke Vandermillen, Vice President of The Principal Financial Group.

“Everybody knows everyone’s getting too many emails and they’re all too long; our sales and service people were getting too many calls from internal wholesalers with the sales idea du jour, so Twitter offered a way to break through the noise,” Vandermillen adds.

The 140-character maximum per tweet on Twitter provided a perfect self-limiting platform for the firm. “Twitter is a bit of an open space where we can have a bigger impact.” Vandermillen also notes the short tweets require The Principal to concentrate on one or two best ideas that resonate with advisors.

To start the social media rollout, Vandermillen says he met with The Principal compliance team to review what the firm wanted to do with social media, and determine how they would implement it.” The compliance team helped us avoid the landmines along the way,” says Vandermillen.

The Principal uses its subject-matter experts to curate content, so wholesalers don’t have to create their own Twitter posts. This helps wholesalers meet compliance requirements; however they can also produce their own content as long as it is first approved by The Principal compliance team.

“Initially our wholesalers told us they thought Twitter was going to be too restrictive, but we provide them with a steady stream of content that they use and appreciate,” says Vandermillen.

To rollout the social media policy and Twitter setup, The Principal used regular marketing communication methods such as web, phone and onsite training.

The latter was tied to the rollout of mobile technology presentations with iPads. “We did a lot of onsite training with our folks around the country and tied the iPad training with social media training,” says Vandermillen.

To drive ongoing participation, The Principal hosts a Twitter chat once a month for advisors called Advisor Talks. They encourage wholesalers and client service teams to promote the talks with advisors by pointing out the ease of participation and access via mobile devices.

The Principal also took advantage of the competitive spirit among its advisors by holding a social media contest in 2013. The contest recognized the best social media use and the “Twitter Champion” among the firm’s wholesalers, relationship managers and local marketing teams. Points were awarded for:

• Total office participation

• Active tweeting by all participants

• Number of advisors engaged in Advisor Talks in each office

• Participation by the regional leader

Vandermillen says the last point was particularly important and created a bottom-up campaign. “If you had an office that was doing well, but their leader still wasn’t on Twitter, they couldn’t win,” he says. “That worked out really well because it added a nice element and helped with the engagement of the leadership team.”

The Principal is running a new contest in 2014 and is also paying more attention to the Twitter engagement of its advisors. Measurement looks at the velocity and impact of advisor tweets, and the number of followers. “We’ve come such a long way from four people sitting in a conference room in Des Moines, Iowa, tweeting and wondering if anybody was listening,” Vandermillen says. “Now we have more questions from the audience than there are thoughts being prompted from our end.”

Social Spotlight: Principal Financial Group Implements Social Media with Twitter



© 2014 ShoeFitts Marketing. All rights reserved. No part of this document should be reproduced in any form by any means, without the permission of ShoeFitts Marketing. It may not be resold or distributed by any entity other than ShoeFitts Marketing. Since ShoeFitts is a consulting and marketing firm, we do not provide legal advice. Hence, nothing in this document constitutes legal advice. Please have good chat with your compliance department and follow their guidelines along with any laws discussed in this document. If necessary, please consult with your legal counsel regarding any law referenced herein. Since life in the social space changes almost daily, ShoeFitts Marketing makes no representation or warranty regarding the completeness or accuracy of the information contained in this document. i http://www.pewinternet.org/2013/12/30/social-media-update-2013/ ii http://millionairecorner.com/Content_Free/The-Older-Generation-IS-Using-Social-Media-According-to-a-Millionaire-Corner-Study.aspx iii http://socialmediatoday.com/pamdyer/1568271/top-benefits-social-media-marketing-infographic iv http://www.forbes.com/sites/drewhendricks/2014/02/25/3-ways-social-media-is-driving-a-business-revolution/ v http://www.fticonsulting.com/global2/media/collateral/united-states/financial-advisors-use-of-social-media-moves-from-early-adoption-to-mainstream.pdf vi http://jaypalter.ca/2013/09/3-reasons-why-financial-services-lag-behind-other-sectors-in-adopting-social-strategies/ vii https://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf

shoefitts marketing - best practices for financial ... · despite early predictions, social media...

Documents