By: D. Bruce Johnston, President & CEO

Some researchers predict that the combined net worth of Generation X and Generation Y will triple by 2018 to $28 trillion. It’s estimated that Gen Y assets will make up about 20% to 25% of that amount. Furthermore, an additional $18 trillion in generational wealth transfer from Gen Y’s baby boomer parents is projected to occur from 2017 to 2052, according to Deloitte.

But despite the expected increase in Gen Y wealth, many financial advisors lack a strategy for investors of that generation. Failure to develop a game plan is resulting in millions of dollars in lost opportunities today, and potentially billions in missed sales in the coming years. The bottom line is that financial advisors need a Gen Y strategy that puts them in direct contact with this increasingly influential group.

To reach this demographic, financial advisors must build sophisticated customer engagement strategies. The baby boomer–focused strategy of building brand loyalty around the concepts of trust and loyalty needs to be replaced by concepts that resonate with Gen Yers, such as value and community. The infatuation that some advisors have with structuring better and more sophisticated products, such as absolute-return funds and other alternative-oriented strategies, won’t resonate with Gen Y, as they may not yet be able to afford them.

Financial Advisors will also need to rethink their entire sales model in many cases. The model of extracting as many investable assets as possible from a small group of wealthy investors will need to be redesigned to accommodate a larger Gen Y customer base that maintains a lower level of investable assets. The days of narrowing books of business down to a manageable 200 or so top investors are gone.

Next, advisors need to better understand the common traits that define different Gen Y investors. Gen Y is generally considered to include those born between 1982 and 2000, whose numbers are estimated to be as high as 70 million. They make up the fastest-growing segment of today’s workforce.

It should come as no surprise that Gen Y is tech savvy. Many are masters of multitasking and seek stimulation 24/7. E-mail and text messaging are their preferred methods of communicating, and they tend to prefer webinars and online technology to face-to-face meetings and traditional lecture-based presentations.

Advisors also need to understand that Gen Y investors want convenience in their interactions with their advisors and other experts via high-quality video, texting and other social networking tools. Further, they are used to receiving this information for free. Communication strategies that target this group need to take these preferences into account.

Additionally, advisors may want to consider taking a page from the GenYWealth.com playbook. Run by a Gen Y certified financial planner (CFP), the site provides financial tips and other topical information to its Gen Y audience, and currently receives 9,000 unique visitors per month. Not to be left behind, the AARP — yes, that AARP — has created LifeTurner, a blog dedicated to providing financial education to investors from 25 to 34 years of age. Advisors need to create sites and blogs that will provide them with exposure to Gen Y investors.

Finally, there is a sentiment that wealthy investors favor advisors with gray hair or no hair, as they both supposedly connote wisdom and experience. Gen Y doesn’t share that bias. They want to deal with advisors their own age, a fact already recognized by UBS and Morgan Stanley Smith Barney, which have supported efforts to have Gen Y advisors serve Gen Y investors. Financial advisory firms may want to consider aligning their Gen Yers with Gen Yers from their firm, and then have them hold events with this demographic group.

The definition of the advisor-investor relationship is not changing, but the form in which relationships are built is changing. It’s as much about building trust with people that have never met you as it is about the message. The savviest financial advisors are delivering unbiased information on finances, resources and personal commentary via the Internet to a very large market.

Financial advisors must learn to communicate with younger generations of investors via the new media that they access daily or risk getting left in the dust by competitors.

Mari Smith Explains why it’s not about the “Number of Fans”

By: D. Bruce Johnston, President & CEO

Numbers drive the asset and wealth management business. We have an Alpha for this; a Beta for that and you can get R-squared over here.  The sign hanging in Albert Einstein’s Princeton office may have said it best: “Not everything that counts can be counted, and not everything that can be counted counts.”

But if advisors are wondering if their Facebook content is connecting with people, I have borrowed liberally from a blog Mari Smith, (borrowed, are you kindin’ me, I cut and pasted the whole thing, it’s that good!!) wrote recently on measuring Facebook engagement.

Mari writes that building a compelling Facebook fan page is one thing. Creating consistent engagement is a whole other skill. In this post, she brings to light several areas you may be overlooking that are causing your fan page to either plateau or not get off the ground much at all.

This is where she’s gonna tell you: “IT AIN”T ABOUT THE NUMBER OF FANS”.

Many businesses set up a Facebook fan page and look to their fan growth rate as the primary success metric.  But the “number of fans” isn’t really the full story. You need to track and measure how much your fans are actually consuming, engaging with and sharing your content.

This is where she tells you even those that “like” you really don’t.

Some studies show that a whopping 90% of Facebook users don’t return to a fan page once they click the Like button. They only see and interact with your content in their news feed. So your job is to ensure you’re consistently posting relevant content that gets seen in the news feed of your fans and inspires lots of engagement with comments, likes, shares and @ tags.

You’re about to learn where to find your Facebook metrics and why you need 30+ fans.

To access your metrics, go to facebook.com/insights or click “View Insights” in the Admin panel at top right of your fan page. Insights are available on all fan pages with more than 30 fans, so if you just launched a new page, you’ll need to get your first 30+ fans before you can begin tracking metrics. Monitor Your Per-Post Insights This is a handy three-part metric that’s clearly displayed right on your fan page wall next to every post you create approximately 24 hours after publishing. The three parts are:

1. What you posted
2. The number of impressions
3. The percent feedback

To clarify, impressions is the number of times your content was “rendered in the stream,” which means that your content was displayed on your fan page wall, shown in the news feed of fans, commented on or Liked. Note that the impressions metric does not equate to an exact number of actual Facebook users; your content may be further down on the news feed while a fan is viewing other content.

To see a more accurate number of actual views, go to Insights > Interactions > Post Views and that number is the total number of times your content has been viewed by fans and non-fans.

This is how you can leverage those “QR” bar codes. I call them those brainy looking things because if used correctly they make you look really smart.

Mari will teach you how to do that right here: The percent feedback is calculated by taking the total number of comments plus Likes divided by the number of impressions. In the example below, I posted a photograph of the latest version of my social media business cards with an added QR code. The post was made on a Thursday at 5:10 pm PT—which is not my normal “high-traffic window” (typically 8:00 am – 12:30 pm PT). However, this particular post was very well-received, as it a) was a photo, which tends to get the highest weight in the news feed, b) contained exciting new information my fans wanted to know about and c) included actionable tips with links. Example Facebook fan page Per-Post Insights If you take 277 Likes + 156 comments = 433 / 70,941 impressions, the percent is 0.61%.

I recommend that you focus on the percent feedback number—you want that to increase. The number of impressions can be misleading. Sure, it’s great to think tens of thousands of Facebook users are seeing your content. But you want them to engage with your content.

Monitor Your Daily Story Feedback

This metric also consists of three components, plus I added a fourth:

1. Total number of Likes on all of your content for any given day
2. Total number of comments on all of your content for any given day
3. Total number of “Unsubscribes” on any given day
4. Total number of “Unlikes” on any given day

The first two numbers are self-explanatory. However, Unsubscribes is a metric that’s frequently overlooked by most Facebook fan page owners. When a fan chooses to hide your content from showing up in their news feed, this is considered an “Unsubscribe.” Remember, your fans are viewing your content primarily in their news feed.

In the screenshot below, you can see the news feed options for a post made by a fan page I’ve Liked: Hide the post, Hide everything by the page, Unlike the page or Mark as spam. Here’s how a fan can hide your updates.

The top two reasons that fans choose to hide your posts are 1) posting too frequently (meaning your posts are dominating their news feed and they can’t see much of their friends’ activity or other pages that they’ve Liked) and 2) posting content that’s not relevant.

You can’t see exactly which fans have hidden your posts from their news feed, nor can you necessarily tell exactly which piece of content caused fans to Unsubscribe (or Unlike). You can only see a total number for the day. It’s vital to keep a watchful eye on this one metric alone. You may see your fan count growing nicely and maybe there’s a decent amount of engagement happening. But you may be just treading water—as new fans join, others may be hiding your content.

You’ll find your Daily Story Feedback under Insights > Interactions.

Facebook Insights —Daily Story Feedback

The fourth metric is the number of fans who have chosen to leave your fan page altogether. At least with the Unsubscribes, they’re still fans and can post and engage on your wall. Facebook users may choose to Unlike fan pages for the same two reasons they hide posts—too frequent or not relevant. Fans can easily hover over any content in their news feed and select Hide or Unlike, as shown in the screenshot above with the Black Eyed Peas (just as an example!).

You’ll find your Unlikes under Insights > Users > third graph down = New Likes and Unlikes.

For now, by monitoring your Unsubscribes (Hides) and Unlikes against what content you are posting each day and how much engagement (post comments and Likes) you’re creating, you’ll be better equipped to fine-tune variables such as the topics you post about, the type of content you post (photo, video, link, status update) and the time of day you post. Over time, you’ll identify your own sweet spot for maximum engagement.

Mari suggests creating your own Excel spreadsheet as a dashboard.  Her coauthor, Chris Treadaway, and she recommend this practice in their book Facebook Marketing: An Hour a Day. I would like to recommend that you visit Mari at her website: www.marismith.com to learn more about how you can use Facebook to build your practice.

What do you think?  What do you measure on your own fan page? Let us know in the comments below if this post was of value to you.

By: D. Bruce Johnston, President & CEO, DBJ Associates

Just as the Internet and e-mail have become ubiquitous over the past 15 years, social media will be the same, only faster. It will weave its way into the fabric of the asset and wealth management business and influence heavily how firms communicate with advisors and end-investors alike. Why? These investors will demand it.

At this point though, formal social media strategies are few and far between in the industry. If you are one of a handful of firms that has headcount and a budget for social media, you are considered a pioneer.  You’ve followed a path similar to the one outlined by Singapore based PR firm GetIt Comms in the attached graphic.

For managers seeking to make small but steady inroads into this market, we think the best place to start is with millennial investors, also know as Generation Y. This is a group that most industry firms overlook in their marketing efforts, which tend to over emphasize the baby boomers. Since many firms lack a Generation Y marketing strategy, it makes senses to roll any new campaign into a broader new social media strategy. Why does this demographic deserve this attention? Well, the numbers speak for themselves.

These millennial investors will inherit up to an estimated $40 trillion from their boomer parents, according to Boston College, and will eventually comprise approximately 29% of the U.S. population. Known as “digital natives,” this generation is expected to communicate more via social networking sites than e-mail in the near future – many  millennial investors do so now.

Remember that you don’t place a phone call to this generation if you want to connect, you text. Google is their main source of answers to their questions and everything is fair game to be posted on Facebook or YouTube.

When crafting social media content for Generation Y, asset and wealth managers  should consider the millennial investor’s preferences by being straightforward, transparent and consistent with their communications. Managers with interactive websites that assist the advisor and investor in understanding their investment process have an advantage. Firms also need to focus on delivering their message across the spectrum of various social networking sites. Remember these advisors and clients now go anywhere and everywhere to gather the information they need to make an informed investment decision.

But the importance of a social media strategy goes beyond millennial investors. The baby boomers are increasingly joining the ranks of Facebook users. Even grandparents are becoming members of Skype, which is very social media friendly. Additionally, changing market forces make it more important for asset and wealth managers to consider formal social media strategies. These factors include:

• A decline in the trust of financial services firms. The viral nature of social media increases the speed in which a brand can be subject to public criticism. In a world where the words “ethical” and “trustworthy” are the attributes in managers that advisors list as most important, it makes sense to have a proactive approach to communicating the firm’s message on social media pages. All managers should practice transparency and candor in all of their communications on these sites.

• Social media will bring business to managers. Social Networking provides advisors and their clients the ability to instantly tap into large sources of data and to hear direct recommendations about investment products from their peers. In this environment, managers need to be assertive in identifying their value proposition to investors.

• Direct communication through social networking sites. The ability to engage colleagues, peers and complete strangers is becoming easier more accepted. It will allow advisors and their customers to maintain and engage with a much larger peer group in the future. Firms should be developing strategies on how to communicate directly to these clients and prospects through social media sites.

Overall,  managers that grasp the nuances of this newly emerging target audience and design communication strategies that include their preferences will capture their share of this market.  Those that don’t will compete for a shrinking piece of the pie as the more competitive players fine tune their strategies and take a larger piece of the investable dollar pool.

By:  D. Bruce Johnston, President, DBJ Associates

Over the past year, we have talked about the transformations taking place in investment distribution. 

I am certain you are viewing first-hand one of the major changes in wealth management – the shift of resources from traditional marketing to social media and networking. 

This resource shift is sure to accelerate as marketers and compliance officers now find common agreement. The release of FINRA’s 10-06 ruling has removed the last impediment to utilizing the cost-efficiencies and creativity of social media programs. A new social media marketing compliance lore will soon be coming into existence.

I’m pleased to announce that my colleagues and I are almost ready to launch our new site – Advisolocity.

Advisolocity is a transformational distribution resource designed for this present moment. Advisolocity – which stands for advisor velocity – is a collaboration of creative marketers, investment distributors, as well as social media and technology specialists.

Advisolocity is dedicated to supporting the business development efforts of advisors, money managers and other service providers who are endeavoring to attract and retain a greater share of investment assets.

Your comments to me have proven invaluable in the past and I would welcome a chance to ask your opinion of our exciting new effort. Here are two of our sample pages:

• Discover Advisolocity Home Page
• Advisolocity Solutions A to Z

As a way of saying thank you for your time and comments I would like to provide you a copy of our latest white paper:  “One-2-One: How social media will allow you to conduct a thousand conversations at the same time”.  You can register and receive the white paper by clicking here: http://bit.ly/a4FiM9  If you prefer and would rather not go through the registration process – we are concerned about protecting your privacy – send me a request at: bruce@dbjassociates.com 

Thanks for your help and we look forward to your comments.

For Financial Advisors, trusted communicator is job one

By: D. Bruce Johnston, President, DBJ Associates 

Brokers and advisors are the most trusted sources for providing accurate information on investments, followed by friends or family, according to the 2010 Edelman Trust Barometer. CEOs landed dead last as least trusted.

Highlights from the survey include:

• Financial performance now scores at the bottom as a trust factor.
• Transparency and honest practices took the number one spot
• Most trusted financial institutions: Local banks were number one, followed by mutual funds and insurance companies

With all of this good news, trusted advisors may still not feel like cheering – especially when confronted with constrained marketing budgets.

“Even though resources are scarce, advisors with a story to tell can still create news,” Advisolocity’s John Drachman said recently. “From free interactive press releases, to white papers and webinars, there are many cost-effective ways to engage customers and prospects that do not cost that much.” The present moment may represent a historical opportunity for advisors.” He added, “Five short years ago their trustworthiness hovered near the bottom of The Barometer.”

What should you do now? Here are Five Things FAs and Advisors should be doing to benefit from this shift in sentiment:

First, they are evaluating their current communications strategy – With so many sources of communication available to your clients today it is imperative that you evaluate and leverage as many as you can.  FINRAs recent clarification around the rules governing social media provides a completely new opportunity to leverage. Don’t let your own lack of expertise in this area prevent you from leveraging these valuable resources – seek professional guidance and input.

Second, evaluate your “customer engagement strategy” – This used to be referred to as customer service but in the new world of communication it’s about “engagement”.  Today’s customers view frequent and honest communication as the most important factor by which they judge financial services firms.  How does your current engagement strategy match up?

Third, evaluate the resources and strategy you have allocated to your marketing programs and branding campaigns – Industry estimates show the number of clients receiving comprehensive financial planning will increase by 20-25% over the next year or two.  What are your strategies for establishing and promoting your brand?  How much time are you devoting to client acquisition and retention? 

Fourth, evaluate your resource allocation to the “Emerging Markets” – I’m referring to the next generation of investors, those between the ages of 25 and 34. This is an often ignored demographic for a variety of reasons but 75% of this group say FAs and Advisors are who they first turn to for financial advice.  This may be that “once-in-a-career” opportunity to make significant inroads into this group assuring future growth for your firm.

Fifth, evaluate what differentiates you from your competition – are you using all the tools at your disposal?  Successful FAs and Advisors will leverage both traditional and on-line communication applications.  To enhance “customer engagement” they will leverage market commentary and portfolio manager market overviews in building their financial planning practice. Have you clearly articulated the advantage working with you brings to your clients in terms of achieving lifestyle and financial goals?

Future success and growth of your business will come from a combination of increased interest among investors in fee-based financial planning models, and how well FAs and Advisors position themselves to take advantage of this once-in-a-career opportunity.  Those assessing their business model as outlined above will certainly stand a better chance of success than those adhering to the status quo.

By: D. Bruce Johnston, President  & CEO, DBJ Associates 

Yesterday I had the distinct pleasure of having lunch with Jason Heinhorst, Partner at FUSE Research Network.  The purpose of our lunch was to discuss asset and wealth management firms’ various approaches to incorporating social media and social networking technologies into their business models in order to enhance client acquisition and retention.

The topic at hand certainly jumped to a new level when returning to our respective cars we found on our windshields postcards that read: IS YOUR 401K HAPPY?

With that simple question and supposedly unsophisticated delivery system – the windshield postcard – RIA Patrick Jolliffe of Jolliffe Capital, Inc., Denver, CO got our attention. The question was driven by data gathered by Deloitte Consulting LLP and Pension and Investments in their 2008 Annual 401(k) Benchmarking Survey.  When asked what was the biggest concern of employees, 81% of employers surveyed responded – “where to invest and which funds to use”.

I quickly called Patrick and asked, “What was the major driver behind your decision to pursue this type of client acquisition strategy?”  His answer was simple:  “The numbers of advisors waiting on 401(k) rollovers is extremely crowded. I felt that I needed a strategy that was “cyber” in nature and allowed me to participate at all levels of this opportunity.”

The point of Patrick’s traditional media postcard was to drive people and prospects to www.happy401k.com where a wealth of social media interaction, information and qualifying tools awaited the visitor.

According to Patrick, the site was designed to attract 401(k) assets from participants at all levels of investment sophistication and investable dollars; provide a consistent communication strategy tailored to certain asset levels and provide face-to-face (f2f) contact for individuals at $250,000 of investable assets or more.

His strategy and site meets the definition of social media.  At its most basic sense, social media shifts how people discover, read and share information and content. The social media tool box of technologies is transforming monologues (one too many) into dialogues (many to many). Through their participation in dialogues, we are finding out that you can transform prospect interest in your product into prospect publishing about your product. In effect, your prospects become your advocates before they become your clients.

That’s why Patrick’s strategy seems to sync well with new research from the study Capturing the Hearts & Wallets of Peak Accumulators: Building Profitable Investment Business among Generation X and Younger Boomers, which the Wall Street Journal recently discussed, stating that:

“After feasting on the baby boomer gravy train for decades, wealth managers now face the reality that this generation will not feed their bottom line so amply in the future.”

The simple math for fee-based advisers is calculated by befriending their social media prospects first as thought leaders to knowledge seekers; then as advisors to clients second.

For the next best growth opportunity, wealth managers should start skewing younger to the next wave of big asset accumulators. And it turns out this potential market is just waiting to feel the advisers’ “love”.

Patrick’s strategy also seems to fit well with an emerging Baby Boomer theme – they are locking into the three “W’s” – www. – at record levels.  An integral part of Boomers’ lives, the Internet is an increasingly comfortable place for them to conduct business, communicate via email and Twitter and learn about products and investment products through websites, blogs and forums; as well as groups of like-minded individuals. In fact Patrick’s “cyber” Boomer strategy is spot on according to one travel industry study as 95.3% travel with computers, 91.08% have access to the Internet “all the time” or “at Wi-Fi hotspots.”

We constantly need to remind ourselves that we are human beings and after all isn’t that what this social media thing is all about? It’s connecting people to people. It’s connecting people to you, your product, your service, your solution.

And what will happen in the future? It will be about connecting clients to clients where they will discuss you, your product recommendations, your service standards, and results of the solutions you recommended.

How will you ever provide this high level of connectivity? Will it come through B2B, P2P, LinkedIn, Twitter, Facebook, some “killer apps”, F2F meetings or maybe windshield postcards? The correct answer is all of the above – it’s all integrated!

At a time when investor skepticism in the 28-52 demographic is at an all time high — only 18% work primarily with a financial professional — Patrick may have created an elegant solution on how to blend the need for communication with the need for cost efficiency.

By the way, it wasn’t until I was miles away that I noticed I had another windshield postcard, this one issued by the Denver Police Department for parking in a no parking zone.   Man, those windshield postcards really get your attention!!!

By D. Bruce Johnston, President, DBJ Associates

While LinkedIn offers an attractive gateway to the world of social media, many financial professionals we have been speaking with downplay the importance of other social media tools like Twitter. That sentiment was forcefully expressed recently in John Ridley’s Visible Man column, which decries Twitter as a stomach-churning indulgence for navel gazers.

Is John right? Are Twitter and its fellow social media apps best suited for distracting easily bored, attention deficit fad followers? That thought was on the minds of many at the Russell Reynolds Distribution Roundtable focused on Social Media tools as a way to expand distribution for asset & wealth management firms in New York recently. The other side of the story was well-represented as well: That every game-changing communications improvement arrived first as a fad. Those over 20 may remember the early cellular phones in their lunch box-size vinyl bags; when it wasn’t unusual to wonder: “Isn’t that guy just showing off? Does he really need to have a phone with him all the time?”

Every communications improvement finally wasn’t really about the app after all, it was about the content, about what the message was trying to achieve.

·         It’s about the characters stupid A cross between blogging and instant messaging, Twitter currently has 5 million users and is growing at a rate of 7500 a day. Each “tweet” is short and sweet, 140 characters. What can you do in 140 characters? Use the word count/character count feature in Microsoft Word, and find out. Remember; work backward from the URL you wish to hyperlink to. That italicized text is 140 words long right there.

·         An application is not a vendor Asset and wealth management firms considering adopting social media applications to enhance customer relationships and loyalty should do so by utilizing a combination of social media applications, not just a specific application. For most this will be a difficult concept to grasp because as managers, most of us are usually being asked to choose one vendor over another.

·         The power of social media lies in their combination. There is no single application that is right for everything all of the time.

·         Face-to-face (F2F) is part of the social media tool kit too F2F is at the heart of every successful media program. Even with communications preferences changing and online engagement tools becoming commonplace, F2F selling still has a place in the solution suite. “Social” means “passed in pleasant companionship with one’s friends or associates” – that’s F2F in action.

·         You are your own thought leader Social media also represents the democratization of information, transforming people from content readers into publishers. Through identifying and publicizing your expertise – or thought leadership – you begin to set the standards of engagement for your network to generate exposure, opportunity and sales.

Some enterprising CEOs are taking to the promise of social media in a big way. Take a look at this message from Vanguard CEO Bill McNabb on the firm’s financial stability. Posted on their web site in April, to date 96 visitors have commented. Simultaneous to the posting of the message on the Vanguard website, they very well could have sent a tweet, allowing recipients to forward, or “retweet”, the message to friends thus enhancing the number of receipients.

Sprint Experience Makes Us Think Twice

Sprint and many other companies and their managers could take a page from this experience that my good friend Scott McKain had recently with Sprint. He twittered a complaint to Sprint about excessive advertising covering up a loss of customers and received this series of 140 character tweets from Stephanie Vinge of Sprint PR:

·         Thx 4 the feedback. You’ll find we’re doing far more than just running cool ads& our customer serv metrics continue 2 improve

·         And, as U can see, we have been watching, listening and helping our customers consistently via twitter, etc. Tweet me anytime

·         Did U know: Sprint has the most dependable 3G network and is now rolling out Sprint 4G. DM me anytime for Sprint info

·         Did U know: Sprint 3G is faster in more places than AT&T

Scott was impressed at her persistent follow-through and responded this way:

·         Grateful for…and impressed by…your kind responses. Challenge is (obviously), how do you re-interest former customers like me?

·         Don’t mean that sarcastically or disrespectfully! It’s that we think it’s tougher to re-engage former customers than acquire new.

Stephanie responded:

·         I get it. not taken that way. I agree. I have been an angry, unsatisfied customer myself (of select companies) but we know what we need to do!

·          Oh, what I’m doing is nothing compared to our company progress. Thanks and give us another chance – you’ll be glad!

And, he’s considering it.

The takeaway is this: When someone voices a concern about your organization, you strengthen your hand by responding just like Stephanie did: Immediately, openly, and sincerely. And she made an attempt to reconnect with a former customer. Who knows? You might get that dissatisfied client back.

Would it be worthwhile for you and your firm in terms of AUM and revenue if you could respond immediately, personally and sincerely to your customers? Would it be worthwhile for you and your firm to stay connected with current customers reconnect with former customers and stay in front of potential customers?

The promise of social media and Web 2.0 is to answer those questions in the affirmative.