Social Media: Engaging Descendants of Investment Advisors’ Clients

| October 11, 2012 | 2 comments

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I recently had lunch in Washington, DC with a friend who is a managing partner of an investment advisory firm with some $800 million in assets under management. After the appetizers had been devoured and we were waiting for our main course, the subject of social media in the financial industry came up.

“A couple of years ago, my partners and I met with a marketing consultant,” my lunch partner told me. “She said that social media won’t gain you any new clients, but may help you not to lose them.”

Hmmm. Don’t agree. That may have been true in the past. But no longer.  

Avoiding Break-Ups

Social Media: Engaging Your Clients' DecendantsMy friend and I went on to discuss what investment advisors already know. When the older generation dies and children, sometimes grandchildren, inherit the wealth, there’s usually a change in advisors. The younger generation has few bonds with their parents’ advisor, so they take the money and run.

That’s a big problem for advisory firms that have built their practice with Baby Boomers.

What To Do

How do you prevent that? Kim Dellarocca, global head of segment marketing and practice management for Pershing, LLC, laid out the issue last month in a guest column for Advisor Perspectives.  In this post, I’ll focus on just one of her points: Customize Communications:

Gen X and Gen Y investors are more connected to each other and to information sources than their predecessors. They are especially intrigued by information about how other investors in their peer group are behaving. An advisor who can deliver this intelligence will be able to gain their trust. Advisors should ask these individuals for their preferred method of communication, and take advantage of web-based and mobile platforms.

Let’s say that in another way: you must communicate on their terms.

Communicating Differently

Morgan Stanley Smith Barney is one of Wall Street’s savviest investment advisory firms. Its 17,000 advisors are among the most successful in the business.  And, surprisingly enough, MSSB has discovered that advisors in their 50s and 60s are having the most success adding, as part of their overall marketing effort, social media. The reason is that older advisors know how to develop and maintain relationships. That doesn’t mean that younger advisors aren’t participating. They are. But the question is: how do they use social media?

Study, Adapt, Change

I interviewed Lauren Boyman, Director of Digital Strategy-Content & Social Media at Morgan Stanley Smith Barney, who told me that even if an advisor thinks their clients are not on social media, they know their children probably are. A high percentage of advisors have come to recognize social media as a low pressure medium that allows them to establish a presence in the minds of younger generations and convey thought-leadership.

Some advisors have a staff member, sometimes even a son or daughter, whose job is to develop an ongoing, engaging presence on LinkedIn and Twitter. Others are more comfortable handling it themselves.

On Twitter, advisors must choose from a pre-approved library of tweets, although they can respond individually without pre-approval and engage in an online conversation using direct messages.

LinkedIn may be the most popular social media platform. In fact, a recent study by Cogent Research appears to bear that out. Just do an advanced search on LinkedIn using the keyword “MSSB” and see how many turn up. Pages and pages and pages of them.

Replies to LinkedIn messages are considered interactive and do not require preapproval. MSSB advisors are participating in LinkedIn groups and using it for business development.

Since MSSB’s social media program was announced in May 2011, Boyman has explained to advisors that social media is just a new way to manage relationships. Of course, there is a thorough training program, a social media policy, and archiving with which all participants must comply.

Beyond the Kids

You’ll have a better chance of not losing out when assets transfer from one generation to the next if you’re known to your clients’  children and grandchildren. To do that, you need to communicate on their terms. Increasingly, that’s on social media. 


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SCOTT PETERSON, co-founder of Relay Station Social Media LLC, has over a decade of experience in market, securities, and regulatory communications. His firm provides strategic communications consulting, integrated Internet marketing, training, and more to a wide range of organizations.

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  • Kristine Christlieb Canavan

    Scott, as always, great info. Especially appreciate your contacts with industry leaders like Lauren Boyman. I’m passing this link on to my clients, telling them about your compliance expertise. I

  • scott_peterson

    I’m glad you found the post useful, Kristine. Appreciate your comments.

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