Advisor Group, a network of three independent broker/dealers which is a subsidiary of insurance firm AIG, launches an ambitious social media initiative Monday, allowing its more than 4,800 independent reps to, in many cases, post freely on Twitter, LinkedIn and Facebook. The firm is expecting a good adoption rate.
“I think it’s going to be a pretty big percentage of about 20 percent [of advisors] right off the bat,” says Art Metzger, vice president, advertising supervision, Advisor Group. “[Social media] was the number one topic at our recent conference.”
AdvisorGroup will use SunGard’s Protegent Social Media Surveillance, a platform which itself hit the market six months ago, to track and monitor posts to the three social networking sites through its portal—even those made on a home computer or a mobile device.
Reps will be required to register their social media accounts through the Protegent platform, allowing Advisor Group to monitor and archive activity and posts. Certain key words such as “guaranteed” and “variable,” will be flagged, says Metzger but reps will be permitted to have real-time conversations with clients.
Advisors who want to address topics such as an upcoming seminar will require pre-approval, however. Messages of this type will be entered into the Protegent dashboard, and then reviewed by a team of 11 Advisor Group staffers, who will push messages to social networking accounts if approved. In addition, a library of 3,500 compliant notes will be available for advisors to use.
Until now, AdvisorGroup’s team of three broker/dealers, FSC Securities Corporation, Royal Alliance Associates and SagePoint Financial, could only create static pages on LinkedIn. But the firm began beta testing this wider initiative with some advisors in February.
Financial firms such as Advisor Group are adopting social media policies furiously as reps demand to use the newest communications tools with customers. Independent firms including Raymond James Financial, Commonwealth and Cambridge Investment Research are just a few that now allow reps to use social media sites and post in real-time. Yet some, including Morgan Stanley Smith Barney, only allow reps to post pre-approved messages on Twitter and LinkedIn, concerned they’ll run aground of regulators.
However Elmer Rich, a marketing consultant with the Chicago-based Rich and Co., believes canned messaged are little better than sales pitches and likely to push clients away rather than woo them.
“Social media is real time,” says Rich, who advises reps that work in the retirement space, along with those who manage ultra high net worth family offices. “It’s designed for real time personal communication. Scripted content is considered spam. One of the sure ways to turn people off on social media is to send them sales pitches.”
Helping financial firms build a social media presence for the past three years, Rich says that compliance is a concern — but firms can give reps the reigns to social media tools and remain on the good side of regulators. The key, he says, is to limit communications about an offering or sales pitch to email and keep the social media engagement “social.”
With its surveillance system, SunGard’s Protegent permits Advisor Group to offer more freedom and social media engagement to its reps. The two firms worked together during the broker-dealer’s beta testing period to further fine-tune the product for the financial services client, including alerting reps when messages exceed the maximum characters for Twitter.
“They were one of our partners in helping us shape the application for the financial services market,” says Suman Garhwal, vice president of business integration for SunGard’s Protegent.
Further enhancements to Protegent are expected within the next year, says Garhwal, including firms eventually determining how and if social media is bringing a return on their investment.
For now, Advisor Group is prepping advisors on its social media initiative as it currently stands, requiring reps take a 1 ½ hour online course through RegEd, a financial services continuing education and training provider. The course will, cover details such as how third party comments could be construed as testimonials. An advisor’s supervisor will need to complete the training as well, says Metzger.
“I think we’ll see a slow and steady build up where social media use will be the norm,” he says. “This is like the 90s, with web sites for advisors. In my personal opinion, you’ll start to see Facebook information on business cards. And instead of clients going to your web site for information, your followers will just see updates.”