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WHAT DOES THIS MEAN FOR THE INDUSTRY, CEOs, CCOs, AND MARKETERS?

Obstacles to social media adoption are real in the financial industry, but that hasn't frozen its professionals in their tracks. In the last year alone, we've seen major brokerages like Raymond James and Morgan Stanley, top asset management firms like BlackRock and Putnam Investments, and one- man financial advisors and everything in between begin to adopt social media in some way.

It's a channel that can't be ignored. Whether your clients are retail investors or financial advisors, firms are recognizing they have to figure out social media. Marketers are partnering with compliance officers to increase their understanding and ensure the right processes are in place. Many firms are using social media at two levels: the corporate level, for building the company's brand and leveraging content; and the individual employee or advisor level, helping them build their individual brand and customer base. Here's how it breaks down across the different advisory channels:

■ Broker/Dealcrs – Many brokerage firms have taken some initial steps toward embracing social media. For example, Cambridge Investment Research, with some 2,400 advisors on social media, permits them to post on Twitter, LinkedIn, and Facebook, subject to a post-use review. Others, such as Commonwealth Financial, prohibit product recommendations. The majority of Commonwealth's 1,400 advisors operate on at least one social media platform. At LPL Financial, more than 5,000 of their advisors operate on some platform: 36 percent on LinkedIn, 10 percent on Facebook, and about 6 percent on Twitter, former Chief Marketing Officer Joan Koury says. LPL advisors are required to get pre-approval for YouTube videos but, other than that, only static content needs to be approved.

■ Asset Managers – Asset managers' use of social media truly depends on their audience. I recall meeting with a top consultant to the John Paulsons of the world who said: “They'll never be on social media. They prefer to keep private and operate with their own closed networks.” But other asset managers are embracing social media – indeed, they view it as a more efficient way to distribute education, research, and other content more efficiently. “It's easier than going here to Schwab and there to Fidelity to post our content,” one CMO told me. For now, CMOs and even CEOs at asset management firms tend to view it as an opportunity to build their brand and compete, for the first time ever, against larger, more established firms. As new consumer- oriented hedge funds are developed, we expect that they, too, will embrace social media.

■ Independent Financial Advisors – Independent financial advisors have an easier time: Many are essentially their own compliance officers. That means no approvals and a more timely ability to get in on trending news or react to a client or prospect. Take financial advisor Jim Ludwick, CFP, formerly with Bank of America and now running Mainstreet Financial Planning. He's tweeting regularly and sending summaries of his top personal finance tweets to his followers. Or Winnie Sun, of Sun Group Wealth Partners, who reports how she's strongly built her client base through social media and snagged a $31 million client through LinkedIn. Indeed, Putnam found that some 29 percent of advisors had acquired a client with more than SI million in assets via social media.

 
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