Brooke’s Note: Pat Allen is a on a short list of people with deep knowledge of both the financial advisory industry and of social media. When I read this column on her website I immediately asked her if we could publish it at RIABiz. Though she is writing for the asset manager who is trying to reach RIAs, I knew there was much for our publication’s readers to glean from her writing. Alexis de Tocqueville’s writing told us in many ways more about America than we knew ourselves. You’ll see that in Allen’s writing about RIAs. Also, asset managers and RIAs are similar so her advice is easy to extrapolate for RIA use.
First published on RockTheBoatMarketing.com
In addition to tracking marketing predictions, we’ve been keeping an eye on business predictions for 2010. And, the short version is that asset-gathering isn’t going to be any easier.
If you’re a mutual fund or exchange-traded fund marketer, you can expect competition to heat up as your marketing counterparts do what they can to encourage investors to return to equity funds, evaluate their Roth IRA conversion prospects and use new, improved tools and expert advice for investment portfolio-building and re-building.
Digital marketing strategy and tactics will be at the center of all of these. That’s a safe guess. Below are five Rock The Boat Marketing predictions for asset manager digital marketing strategy in 2010, along with a smattering of wishful thinking.
1. The benefits of social media will drive its evaluation.
For at least a few companies in 2010, the discussion about social media will switch from the risks to the benefits.
As the differences between the relationships that asset managers have with their clients (advisors and shareholders) stand in stark contrast to the transforming dynamic between other companies in other industries, some asset managers will want in. Communications that are today little more than one-way marketing blasts will be phased out in favor of more frequent, more consistent and even more intimate interactions.
Barriers and sticky issues — and there are plenty — will be ordered and addressed. Adoption will be incremental. We’ve watched Vanguard pursue this path as it offered content ratings on its site; launched a YouTube page and a Facebook page and enabled comments on the latter; and introduced a blog on Vanguard.com. The same is true of TIAA-CREF which last month used its Twitter account to announce its iPhone application.
The Rock The Boat Marketing Twitter list of investment managers now includes 17 companies, including Fidelity, The Hartford, Nuveen Investments, MFS, Lord Abbett and Putnam. Throughout most of the year, we’ve commented on the marketing uses of Twitter. But it’s a bona fide customer service channel in some industries, and we regularly see tweets that suggest that investors expect fund companies to be listening, too.
Why don’t you have a social media strategy in development? Is the answer “Compliance won’t let us”? While wariness of social media might have been considered an appropriate, measured stance in 2009, we predict thinning patience for this in 2010. At some point, clients and executive management are going to interpret it as an excuse for inaction.
2. It’s catch-up time for asset managers and their interactions on the Web.
We liken the modus operandi of most asset managers on the Internet today to that of the neighbor who moves into a bustling subdivision, pulls the shades, keeps the kids from playing outside and refuses to take part in the block party. In 2010, we expect some asset managers to more fully participate as citizens of the World Wide Web.
Of necessity, we expect to see some companies introduce or step up practices that companies in other industries have been following for years. Linking to other Web sites (which is done minimally or on an exception basis by most money management firms today), developing content designed to draw links from other sites, introducing multiple email newsletter offers and adding RSS feeds are among those practices.
We expect to see more marketing communications writers being tasked with writing search engine-optimized copy. “Unfriendly” URLs that are so prevalent on asset management sites are going to be rewritten. The current M.O. dates back to a different time, when the assumption was that someone would come to your site and take the time to browse it. Oh no, they won’t.
An earlier Rock The Boat Marketing post commented on the decline of traffic to destination sites across all industries, including asset management. The asset manager that stands still next year and makes no change to its current approach to Web publishing will suffer a loss of visibility it can ill-afford.
A few money managers are developing new plans, ones that acknowledge the value of using content to pull information-seekers to them (and what’s required to do so) while simultaneously recognizing that most content will be accessed on sites other than their own domains. Also a part of the plan: how to support mobile phone users.
3. Some asset managers will rethink financial advisor sites.
Having worked on asset management Web sites since the beginning, we recall the original objective of advisor-only areas of asset manager Web sites. The intent was to drive engagement—registered advisors who would be more than just users of mutual fund products, they would be advocates, or so the argument went.
It’s time for a reality check on exactly what advisor-only sites are accomplishing today. Multiple surveys (including kasina’s What Advisors Do Online and the SwanDog/Morningstar Marketing To Today’s RIA) suggest that these sites are lightly used by advisors.
American Funds and other managers that command significant market share or have thoroughly and completely committed to the channel may be pleased with advisor reliance on and use of their sites. But the majority of firms that pop the Web analytics hood and look around will see a gaping discrepancy between advisor registrations and log-in activity.
Just about everywhere else on the Web is livelier and more engaging than a dusty advisor site that is mostly a document repository and makes no pretense of offering community. Junior advisors who could be expected to benefit most from the resources of an advisor-only site are especially likely to recoil in disappointment after an initial visit.
In 2010, practical asset managers will resolve to objectively look at the site usage data and feedback. We think a few will pursue alternatives and deploy resources in other ways to provide more meaningful value to advisors as a means of engaging them.
4. Relationship-building will become a group exercise, with the digital marketer one of the exercise leaders.
Relationships will be even more important in 2010 as countless firms set their sights on independent advisors and specifically registered investment advisers (RIAs), whose online reliance is well-documented. Digital marketers can play a pivotal role in this upcoming wave of relationship building.
We see many changes coming (and needed) in how asset managers manage their online relationships. One example: Having communicated so long via print, many asset managers continue the mindset online. The economics of paper and ink dictated the development of a mass message, but many-to-one communicating isn’t the only or the best way online.
Cogent Research’s Advisor Touchpoints 2009, released in November, quantified the volume of communications that advisors are being bombarded with today.
The average advisor has 14 asset manager relationships that produce more than 100 e-mails, phone calls and mailings per month, according to Cogent. The most active communicators among mutual fund firms average 16 client contacts per month; ETF providers average five per month.
Next year will be no different than this year — advisors will open and read the e-mails that are the most engaging and relevant. The difference in 2010, we predict, is that many firms will be tuning their communications with the help of enhancements to their customer relationship management (CRM)s and based on intelligence from their e-mail and Web analytics systems. With your perspective, you’re in a position to add lots of value to what should be a cross-functional mandate.
How effective are online communications in initiating and nurturing relationships? That’s the question for the new year.
5. Ambivalent, tepid marketing will give way to aggressive, spirited content marketing.
Our work requires us to spend lots of time on asset manager sites. There is a sameness to them. It’s no wonder advisors and investors forget where they saw what. A few companies are beginning to differentiate themselves with their content offerings. Next year, we predict more companies will begin marketing their thought leadership.
Next year some companies will realize that Sales isn’t the only audience for the white papers and reports they provide. They’ll figure out they’ve been hiding their light under a bushel (or buried within an Adobe Acrobat file, as the case may be).
Some companies will take a look at the budget they use to invest in new product hoopla and re-allocate a portion of it and their workers to public relations, advertising, email and even social media tactics to leverage the marketing potential of the content.
Each white paper, interview transcript, portfolio update will be announced externally with the same zeal they are announced to Sales Departments.
We’re looking forward to the promise of next year. 2009 and 2008 were not for the faint of heart, to be sure. But they required largely defensive marketing. We think the environment will be conducive to a little more rockin’ the boat in 2010.
What do you see in the new year? Do you agree with our predictions? Do you disagree? We welcome your comments below.
Pat Allen is a Chicago-based digital marketing strategy consultant whose firm Rock The Boat Marketing helps asset management companies explore the speed-to-market communications advantage and measurability of digital media. As a proof statement that financial advisors are indeed gravitating to social media, Allen in September 2009 launched AdvisorTweets.com, a Web site that aggregates the tweets of financial advisors. For financial services marketing tweets, follow RockTheBoatMKTG. For financial advisor-focused tweets, follow AdvisorTweets.
Tim Bosworth added: (Monday 1.4.10 3:04a.m. PST)
Very interesting and thought provoking. They resonate with me.
Nat C added: (Monday 1.4.10 10:33a.m. PST)
Thanks for sharing your well thought out social media predictions.
Stephen Winks added: (Monday 1.4.10 5:33p.m. PST)
The power of Social Media is that it presumes a dialogue between advisors and vendors that presently does not exist in the financial services industry.
Vendors typically have been only interested promoting their product or service with no value ascribed to listening to the marketplace and becomming more responsive to the needs of the consumer or measuring client satisfaction, which is of course the very definition of marketing. In consumer goods companies like Proctor and Gamble, their entire marketing program is geared to consumer satisfaction trying to uncover new and innovative ways to compete. This does not exist in the brokerage industry, otherwise every broker would be held to a fiduciary standatd. The thought of the broker acting in the best interests of the consumer and soliciting and being responsive to investor opinion is not possible until the broker can act in the best interests of the consumer fulfilling their fiduciary obligations.
If the consumer requires the industry to be accountable, transparent and concerned about cost which are presently not important in conventional commission sales, advisors may love it but it is difficult to see that brokerage firms and custodians that support brokers would be responsive. Thus social media could well be mechanism that will move the industry to do the right thing. Is it the change agent that engages the consumer and the advisor that moves the industry to take the steps necessary to restore the trust and confidence of the investing public? It would be nice, but as Harvard’s Clayton Christensen suggests, when well established firms face transformational innovation (fiduciary standing) the most common mistake made is the innovation is viewed in the context of the existing business model when a new business model is in order.
I hope Social Media becomes an important change agent, but that presumes the industry is a willing listener. The question is why should we expect anything different from product vendors, who have not here-to-fore been interested in the best interests of the consumer. The product distribution culture which maintains no investment advice is being provided is incompatable with the advisory services culture focused on advice and fiduciary standing. When the industry is moving toward process that address and manage investment and adminitrative values rather than product sales, an entirely different portfolio construction discipline is required than that advanced by commission sales. Fiduciary standing values the advisor acting on behalf of the consumer in managing cost, providing accountability and transparency not possible in commission sales.
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Les Abromovitz added: (Tuesday 1.5.10 5:36a.m. PST)
I learned a great from reading Pat’s article and was impressed by her insight. I can attest that very few people in the compliance field are comfortable with marketing campaigns that rock the boat. Perhaps, however, compliance personnel are not rejecting a social media strategy, but are simply insisting on parameters to help avoid violations of the Investment Advisers Act.As an example, a social media strategy should not move forward unless policies and procedures are in place governing the use of LinkedIn, Facebook, blogs, Twitter, YouTube, and other forms of online communication. RIAs should also possess the ability to retain these communications and advertisements in accordance with the Books and Records Rule. Although Pat is right that communications using social media are more intimate, keep in mind that a securities regulator may one day be reading them.
Pat predicts that marketing communications writers will be “tasked with writing search engine-optimized copy.” Don’t forget, however, that this content must comply with Rule 206(4)-1 under the Investment Advisers Act and may not be false or misleading in any way.
Les Abromovitz, National Compliance Services, Inc.
Brian Byrne added: (Thursday 1.7.10 8:38a.m. PST)
Clearly, there are reputation, security and compliance risks in the use of the mainstream, consumer-focused social media tools. We at linkedFA.com believe that a purpose driven social media site, created specifically for financial advisors, will allow you to get the best social media has to offer in developing your business, while protecting both you and your client’s privacy and security. www.linkedfa.com addresses FINRA compliance rules for financial advisors.
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