If you build it, will they come? And by that I mean to ask: If your asset management firm follows Putnam Investments in building out a capability to empower your Sales team on LinkedIn (see last week’s post), will there be sufficient activity to justify the effort?
An abundance of research, including a study published by LinkedIn and FTI Consulting last year, suggests that LinkedIn is financial advisors’ favorite social platform for business and especially for "cascading thought leadership."
And, where advisors go, asset managers and their wholesalers eventually find a way to follow. The potential to use LinkedIn as a means of calling advisors’ attention to mutual fund and ETF provider content and even messaging has near irresistible appeal. Heck, LinkedIn has promise if only for reaching advisors in listen-only mode.
But in order for actual interaction—in the form of content reactions and sharing—to occur on LinkedIn (beyond the to-be-expected boost in Website traffic), systems and procedures must be in place. Asset managers’ and financial advisors’ respective Compliance staffs must be certain that communications are happening within allowable and archive-able parameters on a social platform they have no direct control over.
The significant investment (team focus, time and hard dollars) required begs a few questions, which I’ve asked of RegEd Senior Vice President of Customer Communications Blane Warrene. Blane's comments below provide a point-in-time report of the extent of advisor social engagement as of July 2013. As he makes clear, this is a dynamic topic.
Blane WarrenePreviously, as founder of the social media archiving firm Arkovi, Blane had provided a glimpse of actual advisor social media activity by publishing a few infographics summarizing what its advisors were archiving.
Arkovi has since been acquired by RegEd and the database is one of many archiving systems out there. But what advisors are archiving to RegEd may be generally representative of overall advisor activity.
Blane, what does your archiving data tell us about how advisors are using LinkedIn?
Warrene: Part of the "lean toward" LinkedIn suggests an initial comfort level. LinkedIn is viewed as a business and networking tool and, moreover, it was not considered social media before the phrase took new flight in 2008-2009. LinkedIn launched in 2004. So, there is a comfort that LinkedIn is understood and folks who may feel less savvy on other social platforms are confident they "get it" with LinkedIn.
From 2010 to 2012 advisors were making connections and some profile optimizations. In part due to the shifting feature set of LinkedIn and in part to the swell of commentary on the application of LinkedIn for business, in 2013 we see significant upticks in profile updates (embedded files one of those new features, as well as expanded data points, like Projects and Publications among others).
Status updates have trended up quite a bit as folks are simply using their stream more regularly and sharing or creating content.
Specific upticks:
- In 2011 LinkedIn accounted for 3% of volume in our archives, in 2012 it was 20% and now YTD in 2013 it’s 25%.
- The number of profile changes has doubled year over year.
- Skills use exploded as soon as the new features emerged (the nudge that LinkedIn provides when visiting certainly encouraged that.)
- Top two other areas of profile changes are Positions (not just job changes but edits to the profiles—i.e., adding new capabilities like slide shows and videos) and Education (extremely helpful for advisors seeking to tap their alumni connections network).
According to the FTI Consulting/LinkedIn work, half of advisors “would choose LinkedIn over Facebook, Twitter or Google+ to cascade thought leadership if policies were not an obstacle, but only one in five has been able to do so.”
What’s the issue here? Are there levels of permissions granted by the broker-dealers, wirehouses, etc.—i.e., is it one thing to create a profile and another thing (more complicated to review and/or archive, hence available to fewer advisors?) to start interacting with LinkedIn updates?
Warrene: There are no issues with advisors seeing updates. Once a LinkedIn profile is approved (easiest) then all is good. Firms just need to monitor and retain the activity such as status updates and profile changes.
At the wirehouse and broker-dealer level, we do see policy constraints around genuine engagement and content creation and this will stifle legitimacy in the long run (i.e., when a firm enables social and then allows its workforce to use only content the firm creates and distributes, without narrative or editorial freedom).
I understand the business reasons that might be influencing policies governing engagement but are there archiving technology hurdles, as well?
Warrene: LinkedIn does have a more layered approach with their API from a technical perspective—and many data points a financial advisor or a firm would want for discovery, compliance and reporting are quite inaccessible. Connections data is one example where, with more recent moves by LinkedIn, a popular tool [Job Change Notifier, which advisors relied upon to surface 401(k) rollover opportunities] is now shutting down. [See this post for background on new restrictions on LinkedIn's API.]
However, the data needed specifically for compliance is largely present, but an advisor or a firm will need to use a technology solution to get it, which pushes the burden of jumping through hoops for the data to the provider.
One of the technology challenges of social media activity (and really, any of the modern digital actions that are not driven through a singular channel—i.e., Website or email communications) is that you have to juggle numerous mediums (audio, video, imagery, text et al) and multiple channels (first screen, second screen and now third screen—as in computer, tablet and smartphone.) This all has to be supported, captured and then normalized in a way any daily user can consume and interact with it.
No small effort. I've spent years immersed in the integrations, data and finding ways to keep this as simple as possible—and I keep learning something new daily (seriously).
The other technical challenge is the pace. We track and adjust our solution weekly and monthly to pace the shifts on social platforms.
For a forward look, as APIs mature some with large development communities it becomes much easier to resolve the compliance and data management challenges. Contrary to some conventional wisdom, the Twitter API is one of the best to work with. I would set Google as second (including YouTube) and Facebook right after. We get expansive data footprints from those tools.
What kinds of advisor engagement do you see on the other top social networks?
Warrene: Today we see deeper engagement than on LinkedIn.
- For Facebook, our latest stats show one-third of Facebook archive data is Facebook Mail—people want to communicate and engage. Likewise, 25% of Facebook archived data is comments, a nice uptick in engagement with our customers.
- One-quarter of Twitter archive data is Mentions of our users and RTs of their content—a nice engagement ratio off the total.
- With Google+, also an approximate one-quarter of Plus archive data is engagement we track—+1s and Reshares of posts. Now that we've just added support for Business Pages (on July 8) we will see that number tail up.
- As you might expect, photos continue to surge up on Facebook and now Google+ as it is just too easy to share photos there.
Last question for you, Blane. There’s at least one more barrier keeping this business—asset managers and financial advisors included—from engaging with the full capabilities of LinkedIn: Recommendations and endorsements. Both FINRA and the SEC explicitly prohibit testimonials, which is lamentable given that recommendations are key to most business-to-business connections. Any insights from your archive on those?
Warrene: Endorsements are such a murky territory—a client can endorse an advisor verbally or in writing (of their own accord) without issue. It is how business is done. It is simply the endorsement being visible to a wide, uncontrolled group that converts it into an advertisement. Those are clearly prohibited.
However, every day I see firms that prohibit or limit social and yet their producers and advisors allow skills endorsements on their LinkedIn profiles. The murky part is that there is not a narrative endorsement—in essence it is a "like" on the advisor, suggesting he or she is good at that skill (i.e., budget planning, financial planning, public speaking...whatever).
Several advisors who are independent RIAs have said to me, “We won't turn ours off until our wirehouse competitor down the street turns theirs off." A reasonable statement.
We urge folks to disable Recommendations on LinkedIn and for now, without further guidance, to turn off the Skills endorsements. Connections can still endorse—it just does not show who endorsed your skills. That said, we currently have 22,000 recommendations in our archives so not everyone agrees with our guidance. ;-)