Social Media Enablement for Financial Advisors. Contact us for more information Greg Hedges Gregg Barrow

Transcription

1 Social Media Enablement for Financial Advisors Contact us for more information Greg Hedges Gregg Barrow

2 Customer Engagement Model Financial Advisors Protiviti s FSI Customer Engagement Model depicts how and why customers interact with Financial Advisors. Provides Information Obtains Account Status Customer Transacts Business Resolves Issues At the core is the customer the reason the Financial Advisor exists and its ultimate focus Next are the 4 ways the customer interacts with the Financial Advisor The many channels through which the customer interacts are then illustrated The value the customer perceives is categorized and broken down in the next bands Pervasive business risks that must be managed circle the outside of the model Evaluating the success of each channel against the value each delivers helps the Financial Advisor to recognize opportunity to preserve and grow its customer base. 2

3 Goals of Social Media Enablement Enable Financial Advisors (or FA s ) to interact on selected external social networking sites. Enable FA s Marketing / Branding Teams to manage social properties and launch targeted campaigns on selected social networking sites. Enablement Technologies Enable FA s to Listen, Respond, and Engage in customer relationship and brand management within the social space. Implement Technology and Establish Processes to enable, control, support and effectively sustain the Financial Advisors social media presence and interactions in a sustainable fashion. Governance Processes To achieve desired objectives, firms must consider three organizational aspects: governance, processes and technology. 3

4 Social Media Lessons Learned Key Insights in the Financial Advisory Industry Current regulations and guidelines are unclear There is uncertainty around how social networking interactions should be classified (e.g., pre-reviewed vs. post-reviewed). Technology isn t a replacement for a content strategy There s more to just being on social networking sites. It s critical to engage a relevant audience with something meaningful to contribute, say, or share. The technology enablement solution space is large and disjointed Most vendors solutions were initially designed to solve a single core business problem. There are no one size fits all solutions today. Static and template communications will take the social out of social networking The true value of social networking stems from real-time, dynamic communications. Balance between control and enablement is critical It s important to creatively identify ways to enable employees to easily engage in social media without overly-cumbersome restrictions. Persistence is key Building a loyal followers and (personal) brand advocates doesn t happen quickly. Time, effort, and consistency is essential. Critical to have an effective strategy and goals Many communities have fallen flat or abandoned activities because they had no clear goals or strategy on how to achieve their goals. 4

5 Examples of Financial Advisory Companies Using Social Media Morgan Stanley lets advisers use social media Morgan Stanley has been using social media tools interactively, making it the first large financial management firm to do so, and signaling a turning point in the growing market for social media compliance software. Morgan Stanley rolled out the use of LinkedIn and Twitter in June 2011, and chose Socialware, a social media management solution, which has about 100 smaller financial services clients and a partnership with LinkedIn. Socialware s software filters and quarantines social media messages, so they can be reviewed by managers before being sent, then archived for regulatory review. It also has a marketing feature that allows advisers to send preapproved content to clients. Wells Fargo Jumps Ahead of the Competition Using Social Media The firm made a bold strategic marketing move in social media, and is capturing audience and engaging them online, where they enjoy being part of the community. On March 2006, the firm launched its first corporate blog where hundreds of employees use their blogs which are the most-read non-banking pages on their website. The organization has launched Stagecoach Island, an online virtual world where one can explore the island and its hidden secrets, connect with friends and make new ones, and at the same time learn smart money management. Targeting the hard-to-capture Gen X and Gen Y audience, Wells Fargo has created a free gaming platform to grab the attention of the popular market and gain loyalty by offering a fun online attraction marketing tool to engage people. The bank has also branched out to Facebook, Twitter and YouTube. Source: 5

6 Examples of Financial Advisory Companies Using Social Media TD Ameritrade integrates a social media network TD Ameritrade, a large equities broker integrated access to MyTrade a free social media website. MyTrade bills itself as a "social networking content platform for investors. So TD Ameritrade is spinning this into a big social media buzz. MyTrade with thinkshare offers the clients the ability to communicate easily between themselves, sharing their individual opinions, strategies and even real-time trades. The service allows investors to connect all of their social networking platforms like Twitter and Facebook, connecting outside of MyTrade with services like StockTwits, likely to give active traders a broader net. E-Trade Engages on Social Media Platform In 2009, E-Trade took an initiative to support the "Baby" campaign by the use of wide social media network. E-Trade seems to have a finger on the pulse of its customers that would explain the launch of the E-Trade Community - the latest attempt by an online brokerage firm to harness the power of social networking for investors to connect with each other, share ideas, and validate their investment strategies. The platform allows investors to join as a member and create an online profile - although people with brokerage accounts can access the discussions in the community space without having to specifically join as a member. Members can provide their own opinions, understand the overall sentiment regarding individual stocks, and even see which stocks a particular investor has traded over a period of time. E-Trade also claims that personal information about individual investors (including names and account details) are adequately protected. 6 Source:

7 Examples of Financial Advisory Companies Using Social Media Scottrade campaign integrates social media Online investing firm Scottrade has launched its new Welcome To Scottrade television, online and social media campaign. The effort goes beyond showcasing Scottrade s $7 online stock trades to highlight the multitude of available resources and support it provides to help investors make better decisions. Scottrade is portrayed as a community where the residents are knowledgeable and engaged investors who enjoy strategizing, trading and learning more about investing. The direction is based on the idea that Scottrade offers the tools, resources and support investors need to become more successful. The first three of six total television spots begin airing 9/14, via Boston-based Gearon Hoffman. The ads will run alongside Scottrade s Don t Go campaign, which launched in January and features the humorous poor-customer-service antics of Chad Ridgeway. Charles Schwab Uses Social Media for Customer Engagement Charles Schwab created The Schwab Trading Community to allow active traders to share information, help each other trade more effectively, gain access to Schwab professionals, and enhance overall customer satisfaction and loyalty. The social environment primarily employs social networking, blogging, and discussions for community participant collaboration. The online customer community has grown to over 10,000 participants and is made up of many of Schwab s high value clients. The company also launched Money Mondays Campaign on Twitter and its award-winning educational website, SchwabMoneyWise.com to help young adults overcome financial challenges and improve everyday money behaviors. Beyond the financial fitness quiz, weekly tips and bi-monthly contests, the website provides deeper information to answer young people's money questions. 7 Source:

8 Community Maturity Model Process Maturity Benchmarks Community Management Processes Initial Repeatable Defined Managed Develop and Communicate Strategy Familiarize and Listen Participate Build Integrate Sustain Leadership Command and Control Consensus Collaborative Distributed Promote Culture Reactive Contributive Emergent Activist Manage Community None Informal Defined roles and processes Integrated roles and processes Refresh Content & Programming Formal and Structured Some user generated account Community created content Integrated formal and user generated Enforce Policies & Governance No Guidelines Restrictive Flexible Inclusive Deploy Tools Consumer tools used by individuals Consumer and self service tools Mix of consumer and enterprise tools Social functionality is integrated throughout Measure and Report Anecdotal Activity Tracking Activities and Content Behaviors and Outcomes 8

9 Enforce Policies & Governance s Gathering Below is an example set of social requirements gathering activities performed to enable financial advisors. Gathering Categories 13 Policies, Procedures, & Training FINRA Guidelines & SEC Rules Financial Advisors Policies, Procedures, Standards, & Guidelines Advisors Functional Area Representative Interviews 57 s Identified Archiving, Retention, & Investigation Supervision Functionality (Technical) Operational 4 Content Management 9

10 Enforce Policies & Governance Financial Advisor Participation Criteria To successfully meet the stated project objectives and ultimately enable social media interaction, the following regulatory requirements (FINRA NTM 10-06) will be met: FINRA / SEC requirements and standards for record retention (Electronic Record Retention Standards Rule 17(a-3) and 17(a-4)) will be met for all social media records and communications. Policies must be established with clear criteria and requirements around the Financial Advisor ( FA ) eligibility and how FA s are selected to participate and interact on social networks. Clear policies must be established and communicated that address the use of social media and the consequences of non-compliance with documented policies. Training will be conducted to communicate documented requirements, policies and expectations to all employees engaging in social networks or in a supporting role. 10

11 Enforce Policies & Governance s Gathering (Detailed) Enforce Policies and Governance Acceptable use polices Financial Advisor selection criteria Policies for non-compliance Supervision policies Employment status disclosure Development of training materials Supervision notification Training on social media policies Training for social media 101 concepts s on training delivery Specification for who requires training for periodic training Accessibility of policy and training materials Archiving, Retention, & Investigation Auditable repository Social media records must be stored for 7 years WORM storage Serialization of records Exportable for storage repository Indices must be created and stored separately Accessible by third-party downloader Duplicates copies must be stored separately Verification of accuracy and completeness Training for employees with archiving duties Policy or lexicon violations are archived Records will be purged according to policy, legal, and regulatory requirements Storage must comply with legal hold requests New archive repository requires filing and notification with FINRA Supervision Supervision specific policy and procedure Workflow for supervision and flagging Custom defined list of lexicons and keywords List of lexicons must be kept confidential Lexicons must be revised periodically Deploy Tools Integration with the current system Role based access, allowing users / groups to be disabled Quarantine functionality Automatic release of pre-approved content Has content management functionality Standalone workflow / supervision functionality Granular control to disable specific site functionality Support for mobile devices Support for existing desktop / laptop browsers Granular security/access control Provisions to address new features through updates Strong password enforcement Firewall / application proxy rule changes Non-pilot users must be blocked Pilot participants can only access approved social sites Third-party vendor security policies Third-party vendor incident response procedures Third-party vendor security controls Redundancy and resiliency in data center / environment Operational Complaint identification workflow Help desk or problem escalation procedure Content Management Pre-approved static content library Pre-approved content workflow Creation and socialization of content Automated notification tool / delivery method 11

12 Enforce Policies & Governance s Gathering (Detailed) Category Ref Regulatory & Compliance # 1. Policies and Procedures Type Importance Source Detailed Reference(s) "Acceptable Use" Policies that address social media communications must be documented. Policies that address Financial Advisor ("FA") selection criteria must be documented. Documented policies must address policy violation(s) and/or noncompliance. Policies must be documented that include supervision of communications are documented. FINRA NTM (Compliance) "Each firm must develop policies and procedures that are best designed to ensure that the firm and its personnel comply with all applicable requirements." "Firms must adopt policies and procedures reasonably designed to address communications that recommend specific investment products" "As firms develop their policies, they should consider prohibiting or placing restrictions on any associated person who has presented compliance risks in the past, particularly compliance risks concerning sales practices, from establishing accounts for business purposes with a social media site." 1.4 "Firms should take disciplinary action if the firm s policies are violated" 2. Training Training materials need to be developed that address ABC social media policies, requirements, and expecations. Training materials need to be developed that cover Social Media Basics and Social Media Platform / Tool Usage. Training must be provided to all FA's / employees that are selected to participate in the Social Media pilot, prior to engaging in the social space. Periodic training must be provided to all pilot participants throughout the course of the pilot. Training materials need to be posted in an easily accessible place for referrence. Inferred Inferred Nice to Have Nice to Have FINRA NTM FINRA NTM (Compliance) "Adopt policies and procedures reasonably designed to ensure that the firms associated persons who participate in social media sites for business purposes are appropriately supervised." "Firms must adopt policies and procedures reasonably designed to ensure that their associated persons [...], have the necessary training and background to engage in such activities" - FINRA "Firms also must require that only those associated persons who have received appropriate training on the firm s policies and procedures regarding interactive electronic communications may engage in such communications." - FINRA "Training on a regular and as-needed basis. Members should include information in their training and compliance programs describing examples of permissible and prohibited technologies. In addition, while all employees should receive training with respect to the member s general electronic communication policies and procedures, there may be certain employees whose training should be further tailored to their specific business function" - FINRA Notice Archiving & Retention Archived social media communication records must be stored in a location that can be audited for compliance. Archived social media communication records must be retained for 6 years and must be "easily-accessible" for the first 2 years. Archieved social media communications must be stored in a Inferred Write Once Read Many Format (WORM). Archived social media records must be serialized. Archived social media communication records must be exportable to any other medium. Archived social media communication records must be indexed and indices must be stored separate from originals. Archived social media communication records must be preserved by a third-party. Electronic Record Retention Standards Rule 17a-3 and 17a- 4 FINRA NTM (Enterprise Messaging) (ediscovery) (IT Infrastructure) "The member, broker, or dealer must have in place an audit system providing for accountability regarding inputting." -Electronic Retention Standards "Every member, broker and dealer shall preserve for a period of not less than 6 years, the first 2 years in an easily accessible place" -Electronic Retention Standards "Preserve the records exclusively in a non-rewriteable, non-erasable format" -Electronic Retention Standards "Verify automatically the quality and accuracy of the storage media recording process" - Electronic Retention Standards "Serialize the original and, if applicable, duplicate units of storage media, and time-date for the required period of retention the information placed on such electronic storage media" - Electronic Retention Standards "Have the capacity to readily download indexes and records preserved on the electronic storage media to any medium" -Electronic Retention Standards 12

13 Deploy Tools Social Media Financial Advisory Landscape According to Investment News In Tech s complete list of the 111 U.S. broker-dealers, 53 (52%) have a presence or are actively engaged in social media 1. A handful of firms that have publicly mentioned which solutions they have selected to assist in managing compliance and providing content to their advisors are: Firm Archiving & Compliance Content Management (SMMS) Raymond James Erado Unknown LPL Financial Erado Unknown Morgan Stanley / Smith Barney Socialware (Compass) Socialware (Voices) Cambridge Investment Research Socialware (Compass) Socialware (Voices) Commonwealth Erado Unknown 1 Source: 13

14 Deploy Tools Social Media Tools / Solution Verticals in Financial Advisory Companies Archiving & Compliance Providers Tools to facilitate capturing, storing social communications for regulatory compliance. Tools to control and prevent violations. Integration with existing archive platforms. Examples Content Management Providers (SMMS) Tools to facilitate centralized and robust user interaction on social networks. Implements workflow to allow review and moderation of content. Central library for pre-reviewed and approved content. Examples Monitoring & Analytics Providers Tools to listen, monitor and engage in conversations in the social space. Identify PR issues / Negative events. Platform to respond and engage in Customer Relationship Management (CRM). Identify and perform analysis on trends in social conversations. Capture and measure brand sentiment. Calculate ROI and track metrics. Examples 14

15 Measure and Report Social Media Metrics Maturity Initial (Brand Awareness) Repeatable (Brand Interest) Defined (Engagement) Managed (Advocates) Optimized (ROI) Qualitative Pilot Success Customer Feedback Customer Sentiment Pilot Success Customer Feedback Customer Sentiment # of Referrals # of prospects identified % of Reach (Share of Voice) # of prospects converted into customers Cost Savings Realized Effort Spent Learning Effectiveness of Training Effort Building Initial Properties # of Followers # of Friends # of Posts # of Tweets # of Policy Violations Types of content that drives the most interest Employee activity and use patterns # of Links Visited # of Inquiries / Responses # of Downloads # of Issues / Problems # of Mentions # of Re-tweets # of Links # of Shares # of Comments # of Registrations Social Media Program Maturity Quantitative 15

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