“You don’t control things. You can only hope to steer things in certain directions.”

A top Morgan Stanley Smith Barney compliance officer said recently the company has been surprised to discover that its financial advisors in their 50s and 60s were achieving more success in the use of social media than younger advisors.

The comment was made at a recent panel on social media in the financial sector at the NASAA Public Policy Conference in Washington, DC, by Mitchell Bompey, executive director of the legal and compliance division.

Counter-intuitive? You bet. I was on the panel and surprised to hear it. Although a later call to Morgan Stanley to follow up revealed no real statistics, I was told there was a ton of anecdotal evidence to back up the statement.

They Really Get It

My experience introducing and training Baby Boomers and older Gen-Xers in the use of social media is far too frequently like pushing the proverbial rock up the hill. But once they get it, they really get it. It is a revelation for many to understand that social media is just a new way to manage relationships.

Why are older Morgan Stanley advisers finding success using social media? It could be that younger advisors are still building their books. The average MSSB advisor tends to skew older and has already assembled a roster of clients and knowledge, but most realize that the social media wave only getting bigger. Some are surprised to find that many high-net worth investors are already using social media.

The older advisors have also seen the research that indicates when their clients die, 90% of their childrenswitch advisors upon inheriting their parent’s money. Even if their clients are not on social media, their heirs probably are. Social media allows older advisors to raise their profile with children and grandchildren in a low pressure medium.

Pilot Phase Almost Over

Morgan Stanley’s wealth management division was the first wirehouse to experiment with social media. In May, 2011, the firm announced in an internal memo that 600 financial advisors out of a total advisor population of some 17,800 would participate in the pilot. Social media platforms would be limited to two: Twitter and LinkedIn, although some advisors have blogs on their websites.

Most of the focus initially was on Twitter, but LinkedIn has proven to be the primary vehicle for social media engagement by advisors. The rules are less oppressive. The first status update must come from a library approved by compliance. But if someone replies with a public message on the advisor’s LinkedIn profile or on LinkedIn Home, the advisor can respond without pre-approval.

Twitter, on the other hand, is more constrained. All tweets need preapproval, except for direct messages. A recent report that a subset of the pilot group of advisors was being allowed to tweet without preapproval is not correct, although it is under consideration.

Excitement is Building

There is a lot of excitement in the ranks of advisors not participating in the pilot and they want to begin using social media as soon as possible. Before that happens, they will need to go through training that focuses on understanding the firm’s social media policy, how to properly use the platforms, and IT security.

A staged roll-out over two to three months to the wider population of advisors is anticipated soon. Just how soon depends upon Morgan Stanley Smith Barney’s executive director of legal and compliance. 

Need help with your program?

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, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

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Financial advisors are using social media more than ever, and they’re winning more business than ever with it.

The latest from social media scientist Dan Zarrella.

[W]e’re scratching the surface as we straddle the worlds between social media and social business today.

Allow me to start with a complaint. Why would The Charles Schwab Corporation put “60 seconds” in the title of its new video series when the videos average two minutes? I guess you could argue the long-running television program “60 Minutes” is less than sixty minutes when you take out the commercials. But isn’t it on for an hour?

Okay, now that I got that out of my system: I come to praise Schwab, not to bury it.

The San Francisco-based financial firm’s new video series is all that it should be and everything its competitors should be trying to attain. But they better act fast; first mover advantage and all.

Take a look at a video in the Schwab: 60 Seconds in Money series on YouTube. 

A good-looking 20-something, Mike Cianfrocca, welcomes viewers in the first episode to “a light-hearted look at money-related news.” He sports a hip, closely trimmed mustache and beard, a smart pair of glasses, and a shirt and tie. Graphics pop in and out of  frame.  Mike may not rival Jimmy Fallon, but the humor isn’t bad, as in an episode when he says, “an IRA may be the only thing parents understand in their children’s text messages.”

Like other advisory firms, Schwab understands there is a tremendous transfer of wealth happening now. According to a study by the Investment Management Consultants Association in 2011, once parents die, 98% of children jettison mom and dad’s stodgy, old financial advisor for some other arrangement. But unlike other firms, Schwab is positioning itself to take advantage of this key life event by appealing to Millennials. An advisor in a blue suit, white shirt, and tie sitting in his office ain’t gonna make it.

England & Illinois

There are others that understand the shift. Pete Matthews, a financial planner in England who shoots his videos out of doors in beautiful locations around Cornwall. Meaningful Money is the name of his YouTube Channel. 

Then, there’s Carbondale, Illinois-based Jeff Rose of GoodFinanciaCents.com, whose videos have been viewed on YouTube some 73,000 times.  Why? Because he speaks to Millennials in a way they understand. Watch him bust a move! (BTW, in Schwab’s second video in their new series, they refer to the #RothIRAMovement—created by Jeff Rose.)

Videos? Really?

About three years ago, when I was still at NYSE Communications, I attended a seminar put on by PR Newswire on social media. The room was filled with accomplished but nervous-looking 40- and 50-somethings, like me, along with a younger crowd, who were trying to figure out this new phenomenon called social media.

I remember only one thing that the speaker said that afternoon. Why would you want to read when you can watch a video?

The younger people at the seminar all nodded and murmured in assent. I was aghast because I believed—and still believe— that the written word has a depth of knowledge and insight that a video can never convey. But I’m swimming against the tide. After all, YouTube is the Internet’s second most popular search engine. 

Need help with your program?

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, compliance training, and more to a wide range of organizations.

To find out how you can receive a free Amplification Guide to learn advanced social media techniques, click here now.

If you like this blog post, drop us a line on Twitter and Like our Facebook page. SUBSCRIBE TO THIS BLOG BY EMAIL OR RSS FEED

Tips investors should consider when using social media websites. 

It may have been founded in 1871, but the National Association of Insurance Commissioners (NAIC) is helping its community to communicate in a very 21^st Century way.

A white paper by the association’s social media working group is providing important guidance for U.S. state insurance regulators and the industry on how to use the revolutionary medium.

Several state insurance regulators are active in social media. The two Washingtons (state and the District) are leaders in Facebook and Twitter. The Washington Insurance Commission has over 1,700 followers in its Twittersphere, while the D.C. Department of Insurance, Securities & Banking, is a consistent Tweep, with some days seeing multiple posts.

North Carolina is big on Facebook, posting several times a week. The Tarheel state’s videos on YouTube have been viewed over 2,900 times.

As of April 2011, nine state insurance commissions had Facebook pages, 12 had Twitter profiles, and seven had YouTube channels.

Gotta Fix That

Several insurance commissions are already addressing the use of social media by firms licensed to operate in their state through market conduct investigations and the consumer complaint process.  

But many others face difficulties due to strict state policies that prohibit any state government employee from accessing social media at work. If you can’t create a Twitter profile or sign on to Facebook, you’re not going to make much progress as a regulator of social media. Meanwhile, there is a galaxy of activity growing outside your door.

Everyone Needs a Plan

Leadership in their 40s and 50s often find social media mystifying and frightening due to potential errors that carry heavy penalties. But it is a clear mistake to ignore it. After all, some of the largest insurance companies, like State Farm with 1.4 million Facebook fans and Progressive with its videos on YouTube viewed 11 million times, understand the power of social media and are using it in sophisticated ways.

Homework

The working group did their homework. In the research leading up to writing their white paper, they talked to a variety of stakeholders—including consumer groups and non-insurance regulators. And they came up with pretty good guidance.

Among the white paper’s findings:

• An insurer’s policies, procedures and controls… must comport with existing regulations, which include, but are not limited to, statutes and rules related to advertising and marketing, record retention, consumer privacy and consumer complaints.
• An insurer is responsible for all social media content it posts to any of its own directly sponsored sites/spaces and may be responsible for posts of third parties.
• An insurer is responsible for the content of its appointed producers’ posts, if such content can be attributed to the appointing insurer or the insurer’s products or services.
• It is the responsibility of each insurer, agency and producer to determine whether a particular vendor, technology, system or program provides the appropriate privacy, retention and retrieval functions necessary to comply with the various state statutes and rules relative to recordkeeping.

Differences between static and interactive communications, Adoption and Entanglement, risk-based principles of supervisory review are also examined.

The National Labor Relations Board has bad news for employers that want to heavily restrict their employees’ speech on social media.

With resources in short supply, how do you decide whether or not investing ad dollars in Twitter is worthwhile?