Many readers responded incredulously to last month’s cover package on advisors and social media, questioning an assertion by California advisor Winnie Sun that she acquired 40 new clients last year using social media. To many, it didn’t seem possible.
Not only do I think it’s possible, I suspect it could be higher. There are likely many advisors who have landed clients thanks to social media and don’t even know it. Prospects don’t come walking in the door because of something they happen to see on your Twitter timeline. More likely, they’ve met you once, or heard about you, and use your social media channels to check up on you. Why wouldn’t they? It’s as easy as googling your name. Those social media channels will come up. If you are not there, some clients won’t trust you. If you are, and you appear to be a reasonable human being in your interactions over those channels, you have gone a long way toward building trust with that prospect and landing them as a client. That’s what Sun means when she says social media landed her new clients. I know this industry can’t stop talking about social media, and you are likely sick of hearing about it; it doesn’t matter. Better to have those technology tools in place if you want to grow. There’s plenty of advice on how to do it at our website WealthManagement.com.
Who are the influencers? March, of course, means college basketball and brackets. Starting this month on WealthManagement.com, we have a kind of March Madness bracket of our own going on, and we’d like you to play along. We’re looking for the most influential person in wealth management. Who is that? Not the most influential investor, nor the most influential banker, but rather the person whose actions have the greatest influence on what you do. Is it a practitioner? The head custodian? A regulator? A consultant? We’ve narrowed the list down to 32 contenders, and are matching them up in our own March Madness bracket. Go to WealthManagement.com, vote on the winners and at the end of the month you will have helped us determine who is the most influential person in wealth management this year. If your top candidate isn’t among the 32, leave a comment with us and tell us who it is and why.
High Speed Trading was the topic of last month’s editor’s letter, and many readers thought I was too easy on the practice. Truth is, I’m not convinced high-speed trading hurts average investors—the academic literature suggests it doesn’t. That doesn’t mean those traders don’t get a slight edge on the market (problematically, it’s sometimes an edge that they themselves created), but the high speed of trading via computer algorithms isn’t destroying the credibility of the markets, as some have suggested.
Yet recently, Mark Cuban, the billionaire owner of the Dallas Mavericks who made his fortune selling an early tech company to Yahoo, took to Twitter to blast high-frequency trading as a threat to our markets. Cuban is prone to histrionics at times, but he has a point. How easy it would be for a foreign-based enemy, Cuban argues, to use “algorithms” to start trading “billions” and then intentionally “screw up” the markets. When that happens, investors will pull money from the exchanges and voilà: the collapse of our economic system.
Sounds dramatic, and logically, the fact that high-frequency trading creates a risk isn’t an argument against the practice; it’s an argument to make sure those risks are mitigated.
Nonetheless, I continue to be fascinated by this topic and its implications for the markets. I’d love to get your thoughts, on this or any other topic.
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