Fund Management & Social Media: Paving the Unfinished Path – Part 2

Last week, I discussed some of the reasons why I had started using social media as a tool to share information and expand my status in the financial services marketing communication industry. This week, I wanted to talk about how I did it because my leap into this world wasn’t done on a whim. Successes and failures have already occurred in the short life span of the social media realm (think of where MySpace was just a few years ago), and so I knew that I needed to do my homework before taking the plunge.

Throughout my career, I have seen marketing tools come and go, and while I do believe that social media is beyond just a fad, making the assumption that this medium will continue in its current form is a bit narrow in consideration. So, i needed to find professionals to help.

In my research, I quickly discovered that the means in finding social media consultants is different than typical vendor searches because one of the most basic criteria - "experience" - is hard to quantify, and this is where many organizations can go wrong. No one can truly claim to have a decade of experience in the medium (yet). So, should an organization find someone that uses social channels 12 hours a day for personal or recreational use? Or a programmer that has learned to develop applications specifically for these sites?

In short, the answer is no.

In my mind, what organizations should be looking for when delving into social media are people that have had experience in a number of other communications niches (public relations, lobbying, advertising, etc.) and therefore have the knowledge on how social media channels can be utilized, in conjunction with other communications techniques.

In the financial services industry specifically, this is even more necessary because there is an utter lack of solid research available on social media (especially as it pertains to the 40 Act world). So, I reached out to a colleague named Paul Stamler. Paul cut his teeth at BEA Associates, Credit Suisse Asset Management and Bank of America, specializing in Fund Administration, Compliance and Distribution. These days Paul has aligned himself with a social media boutique agency called Make Me Social and is heading up a new endeavor to aid the fund management industry through social media. With this being such a hot topic, Paul’s been busy speaking with many fund groups who want to get involved, but I did manage to persuade him to share some insight with me:

Regarding FINRA:

“Look, the regulations surrounding investor communications have been in place since investors and fund companies exchanged letters through postal mail. Since then, we’ve graduated to fax machines, call centers, web sites, email and now real-time social media. To my thinking, the only difference between all those forms of communication is the speed with which they occur. So yes, there are compliance implications for social media in the fund industry, but they are being addressed in the context of existing compliance procedures. The solution will come from using the one thing that created the speed in the first place…technology.”

Regarding Internal Resources:

“Launching any social media strategy for business will require the input and leadership of Marketing, Compliance, Legal, IT and Sales teams who are currently interfacing directly with customers. Like any good business growth plan, it needs to be focused on the customer and on enhancing existing relationships that will hopefully lead to new ones.

Regarding External Services Providers / Consultants:

“There are a growing number of folks out there who claim to be experts in the area of social media strategy, but very few who can address all of the marketing, compliance and technology issues under one roof. This is the expertise that Make Me Social offers to any organization looking to expand their outreach through the use of social media.

So, to recap, social media marketing - in some form - looks like it’s here to stay, and I intend on using it as much as possible. For those organizations that agree with me, they should remember these suggestions:

1. Discussions are best started internally with a group where minds from Marketing, Compliance, IT and Sales are represented.

2. In a world of supposed experts in a field, partner with a social media firm that specializes and has knowledge and experience in the 40 Act world.

3. Lastly, one of the benefits of the internet, blogs and social media is the ability to distribute information directly to the public in relative freedom. But that doesn't mean there aren't rules, that if not followed, will frame your organization in a poor light. So, be factual and interesting (and yes, even controversial), but do it respectfully.

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Tony Anzivino hails from the greatly misunderstood state of New Jersey. He's worked in Financial Shareholder Communications world from the age of 12, starting with Janitorial duties at his Father's firm. He likes biking, hiking and ketchup.

Fund Management & Social Media: Paving the Unfinished Path – Part 1

For a quarter of 2010, I have been using this blog to discuss the issues of the day in the financial services world, and while I have covered everything from XBRL to the Census, one topic that I have yet to explain is why I have been participating in this medium of “blogging” and “social media.”

I have found that my answer can best be explained from both the number and type of questions I have heard from colleagues, especially fund industry veterans:

“Using Social Media for Funds? Isn’t that kid’s stuff?”
“What’s the value?”
“Isn’t that a FINRA nightmare?”
“What’s the cost to initiate?”
“Who else is doing it?”
“Where does one begin?”
“Who can I turn to for expertise?”

All of these questions have the underlying makings of simply not having enough information, rather than a conclusion based on expert analysis, and in my experience, this means that there is the potential for something big to happen.

As someone that has more than two decades in the marketing world, I look at it this way. Social media hit the mainstream with social networking sites, which were created as a fun way for young people to create their own community, bolster existing relationships and begin new ones. When explained like that, doesn’t it sound like the type of market research that corporations have spent a fortune on throughout the years? But wait…there’s more! How about the fact that social media, when applied properly, can provide measurable, real-time feedback as to consumer needs and preferences?

Eureka!

The reasons for hesitancy in the corporate world are simple, but perhaps misstated. While new news on social media comes out every day, the items that get the most traction are those that are cloaked in controversy and conflict. Privacy, stalking, identity theft, etc., and while these issues are worthy of being taken seriously, the percentage of people that have gone their entire cyber-lifetime without having to deal with anything like this is vast.

Social media is very much in the “wild west” stages of its evolutionary process, meaning that there is an “anything goes” approach for those involved, with very few rules until a proven model(s) is discovered, and that is when the sheriffs will be deputized to enforce law and order. Already though, social media exploration has become littered with the carcasses of “marketing bison” that have just “followed the herd” in exploring this new frontier because that is what they have always done. However, in this case, basing their exploration philosophy on precedent has caused them to miss the watering hole completely and are now withering under the sweltering sun.

In other words, for those in the financial services industry that believe as I do in the potential of social media, the time is now to find the right trailblazer that can guide you down the path. It just so happens that I have found that trailblazer in an old friend and Investment Management Consultant Paul Stamler and a new organization called Make Me Social.

In Part 2 of this blog, I will describe what I feel are the necessary components for choosing the right people in this field and why that has led me to this endorsement.

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Tony Anzivino hails from the greatly misunderstood state of New Jersey. He's worked in Financial Shareholder Communications world from the age of 12, starting with Janitorial duties at his Father's firm. He likes biking, hiking and ketchup.