Brokerage firms are more willing than ever to allow their advisors access to social media in their businesses, which indicates growing acceptance and the acknowledgement of social media’s potential as a business tool.
In particular, not only have many of the firms in this year’s Brokerage Report Card implemented social media policies, the firms are encouraging and assisting their advisors in accessing social media through various support services, such as specialized training for advisors.
“We are coaching advisors on social media best practices and communication tactics for Facebook, LinkedIn and Twitter,” says John Rothwell, president of Vancouver-based Canaccord Wealth Management and executive vice president and managing director of the parent, Canaccord Financial Ltd. “[We] offer webinars and showcase best practices and success stories.”
Similarly, Toronto-based Macquarie Private Wealth Inc., which was one of the first brokerage firms to explore the use of social media, provides “training, development, webinars [and we] travel out to offices for hands-on training,” says Earl Evans, the firm’s CEO and head. “We are very big on flying management out on a regular basis.”
And Montreal-based National Bank Financial Ltd. (NBF) will be putting greater emphasis on this, says Martin Lavigne, president of NBF’s wealth-management division: “We have training on social media. During our national convention, we are going to have some breakouts on how to leverage social media.”
Providing training in social media is not the only approach that firms are using. Another is developing social media-friendly content for advisors to share with their clients.
“We’ve created a library of links to timely articles and research, so it’s easy for our advisors to prompt discussions with their target audiences,” Rothwell says. “We’ve made the actual engagement as easy as possible by providing a tool that allows single access to multiple social media networks for quick, simultaneous posting.”
These efforts are not going unnoticed. Overall, advisors rated the “firm’s focus on social media” category at 6.4 on average vs 5.7 last year, resulting in the largest increase in an overall performance rating among all the categories in the Report Card.
However, despite the increased support from firms, this average rating is still the lowest of all the categories. In part, this is a result of some firms taking a little longer to embrace social media.
“We seem to be lagging the rest of the industry,” says an advisor in Ontario with Mississauga, Ont.-based Edward Jones, which, coincidentally, has just begun to emphasize social media.
“We have a pilot right now,” says David Lane, principal and head of the firm’s Canadian division, “with 1,000 advisors in North America on LinkedIn and Facebook. And we are continuing to assess that. We will increase the number of advisors we have in part of the pilot.”
Another reason cited by several advisors for their dissatisfaction in the social media category is the Investment Industry Regulatory Organization of Canada‘s (IIROC) strict guidelines on the use of social media. IIROC’s guidelines state that client communication via social media should follow the existing rules for advertising, sales literature and correspondence. In addition, any firm that participates should be prepared to monitor advisors’ social media activity and archive all communications that are conducted on social-networking websites.
Says an advisor in British Columbia with Calgary-based Leede Financial Markets Inc.: “[Social media is] the future. The firm is open to it, but the regulatory framework inhibits it. Social media could create more transparency and more access to money managers.”
Adds an advisor in B.C. with Vancouver-based Odlum Brown Ltd.: “It’s impossible to get around compliance with social media. Everything has to be approved, and it’s very [tightly controlled] about what can be posted.”
Embracing social media has been a slow process, as firms must be conscientious of the legal implications involved. Still, the brokerage sector, as a whole, has experienced an attitude shift over the past three years. As a result, some advisors expect their firms’ focus on and support for social media to improve in time as their firms gain more experience in operating within IIROC’s guidelines.
Case in point: last year, Robert Harrison, Leede’s president and CEO, said: “[There won’t be any social media strategy at Leede] as long as I’m around.” Since then, he has softened his hard stance: “I used to be against [social media], but I surrendered. It’s being used as a tool by some of the brokers to keep in touch with many of their clients.”
Despite this collective shift regarding the use of social media, there still is a divide among some advisors over the importance of this tool. In fact, in giving the lowest importance average rating of 5.8 for the category overall, many advisors surveyed say they don’t value social media as a business-development tool.
“It’s not a mass-market offering and it isn’t worth the firm’s investment of time or money,” says an advisor in Ontario with Toronto-based ScotiaMcLeod Inc.
Several other advisors also question the effectiveness of communicating through social media.
“I don’t get involved with social media,” says a Canaccord advisor in Alberta. “Face-to-face interaction is more important.”
Although social media will never replace face-to-face communication, it’s something all advisors should look at.
It provides another “arrow in the quiver,” says Peter Kahnert, senior vice president, corporate communications and marketing, with Toronto-based Raymond James Ltd., “to reinforce the credibility of the advisor and how he or she works with his or her clients.”
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