Social Media Not an Easy Call for Financial Advisors

Flags designating surf swimming area, Rainbow Bay, Qld, AustraliaWhen I accepted the invitation to keynote the Hillross Annual Conference 2012 in Canberra, Australia, focusing on practical strategies for social media, I was pretty sure that one of my main challenges would be finding examples of successful engagement via social media by financial advisers.

Part of the problem is that financial advisers operate in a highly regulated environment and have a justifiable concern that engaging with clients and the general public via social media might bring problems in terms of reputational risk or even put their whole business at risk.

My presentation is in the national capital, Canberra, this coming Friday Jan 20th and I’m very much looking forward to that. Hillross Financial Services is one of Australia’s premier wealth adviser firms, with a network of over 300 advisers and over 100 firms across Australia, who help create and protect the wealth of affluent and high net worth Australians: I feel honoured to have been asked to work with this group and I’m confident I’ll learn from them as well as sharing what I know.

Global issues

It’s clear to me from my research so far that the challenges facing financial advisors engaging with and through social media are by no means confined to the Australian scene.

One of my US colleagues put it this way: “Because of strict laws and internal controls by large financial companies, it’s difficult for many financial advisers to use social media as freely as the rest of us.”

That response was part of one of twenty five answers to a question I posed on LinkedIn Answers, in these words:

Do you know of any success stories of licensed financial advisors using social media to grow their business?

Screenshot of question on LinkedIn Answers about financial advisors and social mediaI would like to have felt I could ask about “case studies” rather than the softer “success stories”. A case study worthy of the name should include a context, a specified problem or challenge, and should report on what went wrong, or not so well, not just on the success elements.

But from the searching and asking I had already done, I thought that would be drawing too long a bow. Even so, I was hoping to pull in a bigger haul of success stories than eventuated.

That experience has emphasized for me that there is a real dilemma for many businesses looking at engaging via social media, and not just for financial advisers. Lawyers, people in the pharmaceutical industry, other professionals, have various boundaries in terms of their use of social media.

I don’t believe the problem is insuperable.

Right now, as as I’ll be proposing in my presentation on Friday, the way through the dilemma is, as I see it, to develop a coherent social media strategy with strong risk management protocols and procedures built in.

To take an analogy from where I live, on Australia’s sunny Gold Coast, we have magnificent beaches but the surf can be very treacherous.  The answer for most of us is not to stop swimming but to swim in the area between the lifesavers’ or lifeguards’ flags. The presence of those flags doesn’t mean that nothing can go wrong, but it does give a reasonable assurance that the risk can be handled.

We have are used to having policies, including risk management, for our finances, our human resources management and other areas of business. We’re just not used to having social media policies as a normal part of doing business. But we need to. While that might seem obvious to people working professionally in the social media space, I am continually meeting business people for whom the idea that you could actually have a robust system of risk management that works for social media engagement seems to come as a surprise .

Getting the strategic framework right, incorporating good risk management processes, is a non-trivial exercise, but it can be done – and must be done by any business wanting to engage seriously and responsibly via social media. (To indulge for a moment in  a bit of shameless self-promotion, helping develop social media strategy is one of the things I do, as a social media strategist, for companies wanting to get the edge, not just follow along.)

In the meantime, I am still looking for great – or quite simple – success stories from licensed financial advisers and wealth managers to help me tell the story.

Des Walsh

Business coach and digital entrepreneur. With coach training from and its Graduate School of Coaching, and a founding member of the International Association of Coaching, Des has been coaching business owners and entrepreneurs for the past 20 years. Over the same period he has also been actively engaged in promoting the business opportunities of the digital economy. He is a certified Neurolinguistic Programming (NLP) coach, and a certified specialist in social media strategy and affiliate marketing.

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  1. Interesting perspective. You are probably right for most financial advisors, and it is a perspective I’m looking to change. I’m an experienced financial adviser from uk, currently living in Dubai, UAE which is not regulated. My role as an advisor has evolved during the years, I now claim life planner. I feel that individuals no longer require the investment planner or portfolio manager, they want and desire consultants to hold them accountable to help them achieve what they want. Financial advisors who consult and help people plan their lives and help them engineer their lives they way they only dream, require social media as an imperative tool for their consultancy. Financial advisors should life planners and so should delve into the lifes of their clientsI’d like to hear your thoughts.

    1. It’s not my specialty, Rasheda, but if I understand you correctly you are working on the basis that people want more control and for the financial advisor to be more of what I would call a coach than a “do it for you” person. I would imagine the really successful financial advisors do get to have a good understanding of their clients’ lives: social media can enhance the capacity to do that and to sustain a good connection.

  2. Brendon,
    Many thanks for all your good insights and I fully support that we should build our framework right at the beginning and implement it to tackle all the potential issues and risks.
    Thus,  to build a solid framework, from my perspective, I would think there may have a few aspects to be considered:
    – overall governance framework
    – risks and issues analysis
    – policy and procedure
    – operational control implementation
    – countinous monitoring mechanism
    – reporting and escalation for risk management
    – risk mitigation implementation
    Among this, I would consider that a fully comprehensive and systematic potential risk analysis when using social media is a key step to understand better about social media.
    Do you have any further insights to share in respect to risk analysis / inventory when using social media?
    Thanks, Raymond

  3. Raymond

    Thank you. All of those elements are important or even essential. There are at the same time questions to be asked about such elements of planning and implementation as:
    * alignment of social media strategy and business strategy
    * identification of which of several possible goals the company wants to focus on – e.g. lead generation, engagement with customers, collaboration within an industry or professional grouping, recruitment… – as well as long term and short term goals
    * assessment of where the company is now in terms of social web presence (or readiness to be establish a presence), and where customers, competitors and partners are
    * what resources the company has inhouse to manage the social media engagement process and what resource it will need to acquire, by recruitment or outsourcing

    While I am the first to talk about risk and risk management, I find that focusing *first* and primarily on risk management (not suggesting you do that but I have been in plenty of conversations where that is the preoccupation) is not a good way to motivate companies to take concerted action.

    I liken the strategic process to that which I imagine is used generally by financial planners. They sell to people’s desire to have their wealth increased and as part of the explanation they explain the risk management framework. If they led the discussion with a preoccupation about risk they would surely lose potential business. 

    My one liner on this for financial planners is (as they would surely say to their clients), risk can be managed (or mitigated) – with the subtext that if you want to engage with social media (or invest to have your wealth increase), risk cannot be factored out or managed out completely.

    Do you agree?


  4. Dear Des, I am so pleased that I was able to get you in front of our Planners at last and I whilst I was in China and unable to attend, I was so pleased with the online mentions and also internal Yammer stream. When I returned to Australia a few days ago….I had many notes of thanks for referring you. Thanks for your thoughtful contribution and really going the extra mile to research your audience and putting yourself in their shoes. 

    1. Thanks so much Annalie, both for recommending me in the first place and for this delightful comment! I’m so glad people found my contribution helpful. One of the best things about the experience was the pre-event collaboration with the Hillross/AMP team. 

  5. The regulatory restrictions don’t have to limit you to tweets about nothing. Professionals can still use social media channels for prospecting and connection. 

    1. I agree, but perhaps I’m missing something in your comment. I’m not sure of the point you are making. I don’t think any professional should “tweet about nothing”. In fact, that would be counter-productive: who would want to have a mindless financial adviser.  

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