Social media: A post is worth a thousand words on the Wild Wild Web

By Dan Sondhelm

Social Media is an invaluable tool that is not beyond the reach of investment companies despite the ever-tightening web of SEC regulation centering on the use of networking sites such as Twitter and Facebook.

Every post is worth a thousand words because social media has a way of creating its own feedback loop. It’s not so much what you say, but what others say about you. The goal is to create a buzz about your firm by getting your “fans” to talk about you.

Facebook global-branding manager Paul Adams uses the term “social design” to explain how employing the right social media strategy can help a buzz build naturally.

Want your fans to talk about you? Do this first.

1) Offer valuable information. One of the most effective approaches to building a social media following is to offer something of value to the community.

Whether on Facebook, Twitter or You Tube, getting your followers’ attention online starts with paying attention to them. Community builder Liz Strauss tweeted, "Know, love and serve the folks who love what you do. They'll do the rest. They'll even get other folks to pay attention, too.”

2) Offer commentary when you re-Tweet the news. Twitter has a 140 word limit per post. Think Headline News. Re-tweet popular topics with your own insights and commentary. Buzz words are picked up more readily by search engines, but to be a successful tweeter, your content needs to do more.

With tax time on everyone’s mind, Vanguard has been tweeting unique tax tips each day. Vanguard, the largest U.S. fund company, has a half-dozen authorized tweeters from different divisions, according to a news story in USA Today.

The company recently tweeted: Tax Day is 4/18 this yr, not 4/15. Postage for large envelopes goes up 4/17. Plan accordingly!

3) Social Media can be used to dynamically leverage your existing communications. Tweet about upcoming webinars, press coverage, media tours, etc. Work with your fund compliance people to approve a “template” post where you can simply slot in the publication and time as needed. If you’re broadcasting a webinar, post a link to register on Facebook. Later, post a link on Facebook to the recorded broadcast.

There are even RSS widgets which can automatically syndicate an excerpt from your latest blog entry into your Facebook page or your website. This saves you the redundant step of saying the same thing twice, while reaching separate audiences.

And, as soon as that CNN interview wraps up, make sure to post a link to the recording on Facebook, Twitter and LinkedIn if you are an advisor, not speaking as a fund manager.

4) Expand your network. Build a network on LinkedIn. Social media itself is all the buzz right now and is poised to continue its exponential growth. To help ensure continued growth for your firm, reach out to the next generation of investors today.

State Street Corporation has been in the Financial Services industry since 1792. Think they’re resting on their laurels? Find out on LinkedIn, which has recently launched a News Module that feeds articles where you are mentioned onto your company profile page.

Simon says “know the regulations”

Social media is an evolving arena. So, too, it seems, are the SEC and FINRA requirements for participation. Your compliance people can advise you specifically, but in general, as long as you have a good documentation system and adhere to pre-approval requirements when needed, you can take advantage of this new media rage.

American Century Investments navigates these waters carefully while still generating a buzz. Many of the company’s tweets and Facebook postings focus not on the company, but on social media itself.

One of the company’s recent posts: “56% of financial professionals agree that social media has ‘significant future potential.’ Up from 44% in 2010”.

Social media can be an excellent marketing vehicle when executed as part of a comprehensive marketing strategy. Facebook global-branding manager Paul Adams says, “Thinking about 'social design' should be embedded in everything we do, and not thought of in isolation. We should think about it the same way designers of electronic appliances think of electricity.”

From the largest mutual fund companies to small boutiques, whether old or recently launched, advisors and mutual fund companies are exploring the new frontier of social media. It’s evolving everyday and cannot be ignored. Yet, social media should not be considered a substitute for traditional distribution strategies; rather a complement that has the potential to strengthen your results.