If you’re in a regulated firm, you’re still struggling with social media. Maybe your marketing department uses it, or you’ve read about a few examples in your industry. But for most of the individual businesses within your firm, you’ll quickly get mired in legal, compliance, data privacy, and data security issues before you can figure out who can post what.
So what if you could realize more value, with less risk, by never posting at all?
Why many firms block access
Over the past year, I’ve met with vendors that help financial services firms use social media. Most of our conversations focus on compliance requirements related to updating profiles, comments, messages, and likes.
You can be in a room with 20 people - lawyers, HR, compliance, technology, and business people - discussing questions such as “Are likes considered recommendations? Do they need to be pre-approved?”
It quickly gets complicated. Legal and compliance, already under siege, get increasingly nervous. And everyone is still uncertain if all this effort and risk has any appreciable return.
In the face of all of this, it’s no wonder that many firms simply block access.
Embracing the 90-9-1
Throughout much of the internet, you’ll notice a reasonably consistent participation inequality. The “90–9–1 rule”, suggests that “1% of people create content, 9% edit or modify that content, and 90% view the content without contributing.”
Overwhelmingly, the people in your firm will be more comfortable lurking - simply reading LinkedIn, Twitter, and Facebook - than posting content.
Instead of fighting that tendency, you can use it to your advantage by focusing on read-only use cases.
While most use cases limit social media to a handful of people in marketing or support, these are applicable for many people across different divisions.
Monitoring: advice you’ll hear over and over is that the first thing you should do when using social media is listen. This isn’t just for brand communications, but for any business and any function. Knowing what people are saying about your firm, about your competitors, and even what your competitors are saying about themselves, has always been important. Social media just makes it easier than ever.
News: Increasingly, people are getting their news via their social filter and they’re also reporting it on social networks. Many different groups - from trading to business continuity - can benefit from an advantage in being alerted to news more quickly. So they should be monitoring Twitter for news as it’s often reported there before professional news channels.
Recruiting: Companies have long been looking for alternatives to exorbitant recruiting fees, using everything from employee referral fees to alumni networks. But why build your own network when those alumni - and millions of other professionals - are already on LinkedIn and Facebook? And when both your HR department and your employees can easily tap their networks on those platforms?
Lead generation: Every broker is looking for potential clients. And those clients are on LinkedIn and looking for advice. Here are some great statistics from a recent article titled “High Net Worth clients prefer LinkedIn”:
“Cogent Research...suggests that of the more than 5 million high-net-worth investors [American and Canadian investors with more than $100,000 in investable assets] that are currently using social media almost 75% picked LinkedIn as the social media platform they use the most for investment research.
The reason for this is respondents felt LinkedIn created a “trusted platform for financial service companies” to engage with HNW investors.
Furthermore, among “ultra affluent” investors [more than $5 million in investable assets] investment research was identified as the top reason they visit the LinkedIn site. And when compared to the average investor, the ultra affluent are 37% more likely to trust information on their LinkedIn network and 157% more likely to trust articles that are shared on LinkedIn.”
Start building a capability
“The best and easiest social media platform for wealth management firms, private banks and others to begin on is LinkedIn. LinkedIn's user interface is more familiar and it's an obvious business platform which makes it the path of least resistance.”
That’s a great way to think about it. Instead of stumbling on all of the complex cases, find examples and modes of access that make it easy for people - both individuals and compliance departments - to get started.
More and more, your firm’s customers will want meaningful interaction using social media.
“53% of HNW investors say they expect to receive relevant and timely content from social media platforms and 45% said they would value real-time interaction and conversation with an advisor or other investors.”
It’s time to take some steps and begin learning how to do that.