By John C. Drachman

With an open mind, a sense of experimentation, and a relatively small budget when compared to traditional marketing, smaller firms are finding themselves rewarded by fresh attention to their ideas and products through social media initiatives.

New strategies link small businesses to clients

For managers between $25 million and $1 billion in assets under management (AUM), social media marketing and networking offers the prospect of heightened media bandwidth for a lower cost than more traditional advertising programs.

The University of Maryland’s Smith School of Business looked at the relationship between social media and small businesses and found that the technology adoption rates in the U.S. have doubled in the past year from 12% to 24%.

Small is still beautiful

The data, undertaken by the University, is based on a December 2009 telephone survey of 500 small business owners. Adoption rate calculations are compared against a baseline report conducted in December 2008.

The study concludes that nearly one in five small business owners are integrating social media into their business processes — Facebook and LinkedIn were the most popular sites. In fact, 45% of surveyed respondents even believe their social media initiatives will pay off financially in 12 months or less.

Deploy more with less

If you have a small financial services firm, perhaps you have made decisions about adjusting your staffing and business model to the challenges of the current environment. Social media programs provide a way to deploy more resources and effort toward your distribution and marketing efforts without heavy additional costs

Even in uncertain recovery, many smaller businesses like yours are committed to expanding their presence, yet have little appetite for going back to business as usual.

The pattern that characterized the emergence from similar market environments in the past is not being repeated. The cycle of downsizing and staffing up has been altered as executives look to more efficient ways to motivate purchasing behavior through new combinations of technology and communications.

This article is a summary of an excerpt from “An Introduction to Social Media: A Guide for Smaller Money Managers.” Authored by R. Jeffrey Young, Huntington Asset Service, and D. Bruce Johnston, Advisolocity, downloadable copies of this report are available at http://www.advisolocity.com/huntington/

By John C. Drachman

Will money managers soon be showing their customers more love?

According to D. Bruce Johnston, due to pressures from outside the industry, most notably from banks, the answer is a resounding “yes.”

Loud and clear: customers want attention

“As the customer service benchmark is being raised outside of the industry, money managers too will find themselves held to a higher standard by investors and advisors,” added the president of DBJ Associates.

Banks have raised customer service bar

Johnston sees part of the pressure coming from the rise of mobile technology, especially  iPads, which “are conditioning people to expect instant access to information 24/7.”

According to Johnston, such initiatives are not unknown in investment distribution. “It’s something asset managers have been trying to teach through value-add programs — to be more sensitive to the clients’ needs,” he said in a recent Hannah Glover article for Ignites. “It’s time for asset managers to apply the same standards to both advisors and investors,” he added.

Johnston, co-author of Introduction to Social Media with R. Jeffrey Young of Huntington Asset Services, added that “As firms study and adapt to the new world of enhanced customer service, they should not overlook creative and cost-efficient solutions that are close at hand.”

Johnston concluded that social media blogs and networks offer financial marketers a convenient and inexpensive way to provide more service-oriented communications to customers.

There is a new research forum in town that is dedicated to investigating a method for predicting mutual fund performance.

According to Neil Anderson, of MutualFundWire.com, “Fundsters may repeat the required-by-law ‘past performance does not guarantee future results’ mantra, but a pair of Fidelity alumni are taking a stab at anticipating outperformance.”

Quadrant power: Can FundReveal make performance predictable?

The two ‘fundsters’ are Ani Chitaley and Anthony DuBon, co-developers of Fund Reveal, a  fund performance system.

The purpose of their blog, Mutual Fund Performance Forum, according to Mr. Chitaley, is to engage advisors and investors in a conversation about  mutual fund measurement best practices.

The Power of the Quadrant

At the heart of the duo’s research efforts is a quadrant analysis that employs risk, return and persistence measures to offer a predictive approach to mutual fund performance.

When investors enter fund names or symbols, FundReveal charts each fund in comparison with the S&P 500.

“We aren’t looking for the funds that hit home runs last quarter or last year.  We’re looking for those that provide solid best quadrant performance quarter after quarter and year after year.”  Mr. DuBon concluded.

To develop their new blog and integrate it with their web site, Mr. Chitaley and Mr. Dubon turned to Advisolocity’s John Drachman and Zach Hedges to implement their digital content strategy.

There is a new research forum in town that is dedicated to investigating a method for predicting mutual fund performance.

According to Neil Anderson, of MutualFundWire.com, “Fundsters may repeat the required-by-law ‘past performance does not guarantee future results’ mantra, but a pair of Fidelity alumni are taking a stab at anticipating outperformance.”

Quadrant power: Can FundReveal make performance predictable?

The two ‘fundsters’ are Ani Chitaley and Anthony DuBon, co-developers of Fund Reveal, a  fund performance system.

The purpose of their blog, Mutual Fund Performance Forum, according to Mr. Chitaley, is to engage advisors and investors in a conversation about  mutual fund measurement best practices.

The Power of the Quadrant

At the heart of the duo’s research efforts is a quadrant analysis that employs risk, return and persistence measures to offer a predictive approach to mutual fund performance.

When investors enter fund names or symbols, FundReveal charts each fund in comparison with the S&P 500.

“We aren’t looking for the funds that hit home runs last quarter or last year.  We’re looking for those that provide solid best quadrant performance quarter after quarter and year after year.”  Mr. DuBon concluded.

To develop their new blog and integrate it with their web site, Mr. Chitaley and Mr. Dubon turned to Advisolocity’s John Drachman and Zach Hedges to implement their digital content strategy.

By John C. Drachman

Confronted with the shock of the new,  it’s only natural for large organizations to trust that yesterday’s strategies will continue to work a little longer.

Such is the case with the pace of adaptation for Bank of America Corp.’s Merrill Lynch and Morgan Stanley Smith Barney concerning FINRA 10-06, the generally enabling regulatory policy governing social networking.

Smaller financial firms take lead in SMM.

According to a recent article in Financial Advisor Magazine, neither of these major firms allow “advisers to conduct business through social networking sites.” The article quotes one spokeswoman, saying: ”There are substantial restrictions on its use right now, but we are continuing to review the issue.”

Meanwhile, for smaller, nimbler broker/dealers and RIAs the implication is clear: the free marketing bandwidth provided by FINRA’s common sense and clarifying guidance is theirs to use nearly exclusively. Because the social networking and media playing field is theirs, at least for the moment, enterprising marketers with few resources can be the first to adapt to the newest game in financial marketing.

Growing numbers of social media strategists and service providers are determined to help these Davids live like Goliaths — if only for a day — until the slow-moving giants make their moves.

Addressing  FINRA 10-06′s archiving requirement, for example, SocialWare’s Compliance Guide to SMM points to a number of ways to meet data storage needs to reduce the risk of non-compliance.

Steph Sammons intros advisors to SMM

Other firms are concentrating on how financial advisors can put FINRA 10-06 to work in their distribution strategies. Financial social media strategist Steph Sammons is showing her advisor clients how to take advantage of new media by setting up  blogs and improving their presence on social networking sites.

“Attracting new clients has suddenly gotten easier,” says D. Bruce Johnston of DBJ Associates. “Low-cost and creative, social media strategies are like free money to underfunded marketing departments.”

SMM offers free bandwidth to enterprising small businesses.

For smaller firms looking to be the speedboats in the river while the lumbering barges make their glacial turns, Mr. Johnston points to a good SMM road map for advisors to start with: One-2-One: How to Have 1000 Conversations at Once.