Four Signs Your Competitors Are Using Social Listening Better Than You
By Pius BoachieOct 16th
Financial advisers work in a rather conservative industry, but that doesn’t mean that they are not interested in stepping forward to embrace the advantages of social media to build a brand and grow their business.
Since this industry is highly-regulated, advisors must take care when using social media to avoid risks associated with this medium.
Proceeding with caution must be the order of the day for all advisors if they hope to be successful while avoiding the pitfalls that await them if they are not vigilant in their use of these sites.
Like most professional services, UK financial advisors must comply with certain restrictions about how and what they are allowed to communicate publicly.
Registered financial advisers are required to abide by a strict set of regulations set out by the Financial Industry Regulatory Authority (FINRA).
Here are just a few of the risks of using social media for financial advisors:
One of the wonderful things about social media is that it creates a level of transparency that did not exist previously.
When it comes to financial advisers, this can be a double-edged sword. When information is disclosed to the public, it must be transparent, and thus fair, to all investors.
Rumours can get a life of their own very quickly online, and companies need to take steps to ensure that information posted on their Facebook and Twitter feeds is accurate.
They must also respond quickly and appropriately to these types of posts to shut down any rumours before they start to spread.
Financial advisors who receive enquiries from their clients can direct them to the appropriate social media pages to keep themselves at arms’ length from the rumours.
In a personal meeting (or even in a telephone conversation), the adviser can rely on prompts from the other person to get a handle on his or her level of knowledge about investment products and whether the information is being completely understood.
In cyberspace, it’s all too easy to assume that a prospect or existing client has a level of sophistication that may not actually be present. To respond appropriately to client expectations, advisors can use the power of the Internet to host online seminars and virtual meetings to educate clients about their options.
These are excellent ways to create an atmosphere of trust, which is essential to the financial advisor’s brand.
The relationship between the adviser and his or her client must go beyond simply discussing recommendations without any background information about why a particular type of investment would be a good fit for that particular client’s needs and goals.
This is not a “one size fits all” type of industry, and anyone who tries to make all client investment decisions fit into a neat little box will not last long in the business.
Financial advisors must also be on their guard that any communications that they make on social media sites do not violate their clients’ privacy (this concern also extends to potential clients as well).
Since the communication on social media sites is interactive, as opposed to face-to-face or via e-mail, it can be very easy for it to appear to have crossed this particular line.
If a client approaches an adviser to ask a question on Twitter and the adviser responds in a manner that is too specific to that person’s financial situation, the response may be viewed as violating the client’s privacy. It was, after all, answered in a very public forum and provided specific advice tailored to that person’s needs.
Ideally, the advice would have been provided in a private consultation.
Since financial advisers are also required to keep detailed records of their correspondence with their clients, this rule also applies to social media sites. Advisers must have some type of system for record-keeping to capture this communication to remain in compliance.
While there is always a risk of a corporate website becoming targeted by a hacker, social media also exposes the financial adviser’s company to risks. Hackers can take over Facebook pages and Twitter feeds, as well as websites, of a corporation.
If this occurs, they can easily access information pulled from private messages on Facebook or post false or misleading information on the company’s wall or Twitter feed.
To minimize this type of threat, clients should be directed to contact their adviser directly with questions or concerns rather than through a social media site. The caution about putting any confidential information in a private message will have to be posted on the financial adviser’s Facebook page and tweeted out at regular intervals.
Existing and potential clients need to know that they are free to reach out to the adviser at any time but that sharing personal information, including account numbers and other details, is not recommended due to potential security concerns.
Offer a telephone number where the person can leave a confidential voice mail message to arrange an appointment for a consultation or a ring-back. He or she will be able to get the personalised attention that he or she needs without the same level of risk.
When used correctly, social media can help financial advisers to find new clients and keep in touch with existing ones.
It is not without risks, though, and advisers need to be mindful of the potential hazards associated with using them. The potential benefits still outweigh the risks, though.
Since the number of social network users is growing daily, it would be a mistake for advisers to avoid using the sites altogether due to security concerns or a feeling that time spent online in this manner would be better off chasing leads in a more traditional manner.
This effective marketing tool for business is here to stay.