According to AdvisorTweets, Financial Industry Regulatory Authority Inc. (FINRA) says the delay is needed to reconcile comments from their membership.

As reported in DBJ Associates, the industry is taking a closer look at social media as sales literature because advisors and investors want to have a hand choosing the communications forms they prefer. “The cost of not communicating to advisors and clients through their preferred vehicles (social media) does not make a lot of long-term business sense.” Mr. Johnston said recently.

You can download your copies of Proposed New FINRA rules and Comment on Notice here.

Mutual fund marketers want to use social media

FINRA has no intention of addressing  the social media question directly.  In fact, the term “social media” appears nowhere in both the text of the new rule, nor Regulatory Notice 09-55, the comment notice.

The notice invites interested readers to call Joseph P. Savage, Vice President and Counsel, Investment Companies Regulation, at (240) 386-4534; or Thomas A. Pappas, Vice President and Director, Advertising Regulation, at (240) 386-4553 and state opinions.

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Neil Bathon

A comment on social media from Neil Bathon, founder, FUSE Research Network LLC

Separating the facts from the hype of social media’s promise or menace has never been more important.

Is social media new and different — or a repackaging of traditional communications techniques? We invite promoters and skeptics in equal measure to weigh in on the veracity of what social media consultant, D. Bruce Johnston has termed, “nothing less than the transformation of how investment products will be packaged and distributed through social media.”

This week’s guest post is from Neil Bathon, founder at FUSE Research Network LLC and Managing Director at PMR Associates LLC.

Mr. Bathon has devoted his professional career to improving the productivity and effectiveness of the resources dedicated to the development and distribution of investment products and solutions.

Two way communications puts the 'social' in social media

Mr. Bathon recently commented on last week’s Social Media Memo post, RIA Steege turned to social media “to do opposite of what everyone else was doing.” To adhere to Mr. Bathon’s own standards for accuracy and courtesy, the following is published in unedited form.

“I am sure I am being overly simplistic but the article seems to suggest that Mr. Steege sent out an e-mail to a qualified list of prospective clients with an invite to a seminar.

“I did not pick up on (and do not get generally) the social media aspect of the initiative.

“I am all for using different mediums to reach people (phone, e-mail, website, posters, flyers, etc.). It seems like there is a desire to raise traditional sales and marketing tactics to a new special level and place mostly by the consultants and purveyors of social media services that are trying to differentiate themselves in order to build their business and gain clients.

“Said another way…if I use my Blackberry to put together a thank you e-mail in the parking lot of the B/D I just met with…and I attach a document that is relevant to what I just discussed with the broker…that is good follow-up. But if I use twitter to deliver a 40 character thank you, is that social media?

“Maybe it is definitional. For me, social networking is where people that have a common interest and connect or link themselves with the purpose of advancing their “cause”…whatever that may be…cooking, politics, hunting, etc.

“Also, the fact that people can use LinkedIn to find out how they are (or could be) connected to someone is, for me, a neat sales prospecting tool but unless we (at FUSE) develop a deeper bond and connection between folks where they ‘participate’ in something….I don’t think we have created a network.

“Just a thought… Neil”

Following the success of a social media campaign last summer in raising assets under management, Chuck Steege, a Registered Investment Advisor from Bucks County, Pennsylvania, recently explained what motivated him to experiment with the Internet’s newest marketing tools.

Mr. Steege’s sense of experimentation, in fact, flew in the face of a recently released report from Equation Research that stated that  ”not knowing enough about social media” was given as the #1 reason for not trying it. Mr. Steege readily admitted he knew little about keywords and third party blogging when he started and yet he continues to hold his own today on Google page 1 for keywords AMT+credit+refund, a business emphasis of Mr. Steege’s, as recently as November 11.

“ The primary driver,” Mr. Steege said, “was to do the complete opposite of what everyone else is doing. Furthermore, the only way to understand something is to try it yourself!  Nothing gained nothing lost.”

Equation Research also named compliance constraints as a frequently cited reason by financial professionals to avoid blogging, twittering, LinkedIn and other social media vehicles and techniques. Regulatory compliance was not difficult, Mr. Steege said for a couple of reasons. First, the content was educational in nature and not product driven. Secondly, he said the combined efforts of his “marketing team — Paula David, Bruce Johnston and John Drachman — was important because they look at marketing through the compliance lens.”  

Of all of the tools employed in his summer campaign, the one which contributed the most to business building was the access Mr. Steege had to the e-mail list of a regional center of influence, an estate attorney, who participated in the three-part series with him. For more details on how the program generated $40,000 in commissions and fees on an investment of less than $10,000, see Financial Advisor’s Small Media Effort Pays off Big.

Last year, as imploding credit markets roiled the economy, mutual fund organizations throughout the country took stock of their revenue prospects.

It was clear that a change or two was in the wind at Denver’s Old Mutual Investment Partners, too. For Chief Executive Officer, D. Bruce Johnston, one more change was clear: He wanted to do something different.

From thought leadership to measuring results

Two major influences fueled his thinking: The prolific blogging activity of his friend, the best-selling author of The Ultimate Client Experience, Scott McKain and the promise of social media metrics and analytics in measuring the success of advisor value-added programs. After serving as a C-level executive at Conseco Funds, Garthmore Funds, Sentinel Funds and Old Mutual, he wanted to take a closer look at the role of social media in transforming business strategies in general and mutual fund distribution in particular.

Bruce shifted his family to Tuttle, Oklahoma where he started networking, interviewing industry thought leaders and practicing the social media arts. In short order, his blog, DBJ Associates became a rising source of reliable social media information for the relatively slow-to-adapt financial services industry.

He also completed a program to provide vigorous, aggressive third-party blogging support to an RIA who wished to attract interest in tax planning themes during the dog days of summer.

Bruce continued, “Social media in the form of social networks, online communities or blogs will become more and more a routine part of marketing, sales and distribution. That’s where the future is headed.”

According to Kasina and Horsesmouth, it’s official.

Financial advisers find American Funds’ adviser-only site the best, two-to-one, over nearest rival Pimco/Allianz.

Can creative, marketing and managerial professionals learn something from this achievement?
Web designer Zach Hedges of Actualize Media thinks so.

Why American Funds’ Adviser Center is the one to beat

“A solid social media strategy begins with a well-crafted web site. Believe it or not, the first thing that is right about this site is that the tagline provides a clear message: this site is about the advisor,” Zach said. “There are many sites out there where the ‘you’ is used for both customers and advisors.”

“The second strength is the intuitive navigation that step-by-step takes the adviser through the qualifying process. Well-organized and friendly to business-building, clearly marked prompts and suggestions keep the adviser from becoming overwhelmed.

“The hyperlinks provide transitions to statements like ‘let me show you what I mean’ which leads to further client qualification and a personalized hypothetical. Very cool.

“Third, the site shows you where to find more resources and support — in a way that leads to cross-selling opportunities.

“Attractive and conservative, the site seems designed for people on the move. Fonts are big and bold. The brand is American, red, white and blue all the way. This site just keeps on giving.”