3 Social Models Broker Dealers Need to Avoid

Enabling financial professionals  — advisors, brokers, agents, wealth managers — to not just use but succeed with social media marketing poses a number of challenges. Regulatory compliance, combined with the need to generate an order of magnitude more client-facing content is a perfect storm for firms juggling many issues like DOL compliance, or simply avoiding the hazards with existing technology like email. Combine this environment of regulatory compliance with financial professions who are not always natural marketers, not always excited about learning new and complicated technology, and many of whom have unique and often independent business models and you have a recipe for a high-cost, low reward program. And yet, consumers and investors are using the social web ever more to evaluate service providers and learn about financial ideas and products. Moreover, many financial professionals have seen great success by embracing social media. So, as Paul Tyler, the Chair of the LIMRA-LOMA Social and Digital Business Committee provocatively asked, "how do we get greater agent adoption of the social marketing tools we already offer?". See the Gainfully case study on enabling social in a 600 advisor broker-dealer

First Generation Approaches

Over the past 5 years a few approaches have been developed to deploy social media programs for financial professionals. The lack of time for marketing and regulatory compliance requirements have driven content solutions in financial services in three different directions, each of which have significant problems:

  1. One-to-One Pre-Approval
  2. Pre-Approved Third Party Library
  3. Supervised Open-Posting

We'll deal with each of these three models, the relative benefits of each, and the inevitable drawbacks that make each unworkable options in ultimately ensuring social media can be successful for financial professionals.

One-to-One Pre-approval

In this model, financial professionals submit social content (and content in general) to be reviewed and approved for their individual use. This approach ensures a high degree of compliance confidence. However, while well-suited for proprietary content, such as private research, presentations, etc., this approach will fail very quickly within social media program as it scales. The simple reason is that, as advisors submit content to be approved, the workload on ad review teams rises in direct proportion to the number of advisors.


Combine this with the fact that most advisors to not combine content approval with a content re-sharing mechanism (that will share the content multiple times) and the outcome will be high direct (costs paid by the financial professionals to support such a program) and opportunity costs (when the friction and direct cost of the program ensures the program cannot be successful for the financial professionals).


Moreover, further opportunities are missed when approved cannot be (or is not) leveraged by other eligible users in the firm, something the third party library model, which we'll address next, attempts to solve.

Pre-Approved Third Party Library

Libraries of pre-approved content offer an initially promising way to ensure a high level of compliance while offering a larger selection of content for financial professionals to use. The benefits of exposing a library to many of your eligible financial professionals means that  many can take advantage of the library, typically numbering between 50-500 items. In addition, compliance teams have a "place" they can sent their financial professionals to, ensuring they can discover content that is immediately shareable. However, with a growth of users this model inevitably runs into an issue: these libraries are static, and often not easily populated with additional content. This means that the value of the content rapidly diminishes as time elapses and as advisors enter the program.


Here's an example originally collected by Matthew Zeitlin over at Buzzfeed. "One thing the new policy promises, less of this: where Morgan Stanley advisers across the country were all saying the same thing": https://twitter.com/C_MackayMS/status/476360032939147265 https://twitter.com/VEGroupMS/status/476350075615313920 https://twitter.com/SeamansInsGroup/status/477516405789978624 From this example, it's clear that a commitment to diversity should also extend to the language and messaging they extend to their clients on social media. The point is not that there is a risk of mockery (though there is), its that advisors look impersonal.

Supervised Open-Posting

With FINRA's increasing tolerance for dynamic content, many firms have chosen to forgo the costs involved in pre-reviewing some or all content. This provides a huge amount of freedom to financial professionals. But the challenge is answering the "now what?" question: once they are free to do anything, their supporting firms can provide information and even coaching about what to do next, but the professional doesn't have a service-oriented structure in which to continue developing.


The inevitable conclusion for most is, absent a guiding service, social media will cease to be a priority in the context of their other obligations. Both they and the firm lose: the professional loses unknown business and their firm loses an opportunity to empower their advisors when they could be building their business and both of their revenues. The bottom line: users need content to succeed. It's not the entire solution, but content and a content strategy is what ultimately shapes their brand and reflects yours.

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