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Are You Ready? FCA Restatement Puts UK Social Media Programmes on Alert

The FCA recently published guidance reiterating a long-standing mandate of the regulator: the onus is on FCA-regulated organisations to monitor employee behaviour for bad actors. Therefore, even if conduct isn’t tied to a specific rule, poor behaviour that results in someone getting harmed will see the FCA take action.

For firms doing business in the United Kingdom, it’s time to ask whether you are sufficiently prepared for the restatement of this mandate. Essentially, the FCA is putting those firms on notice that certain activities that pertain to conduct—including communications across social networks—will now be under greater scrutiny. 

In conjunction with the Senior Managers and Certification Regime (“SMCR”), which makes senior management accountable, the FCA’s restatement puts further responsibility on leadership to ensure their employees are acting in a way that is consistent with their policies.  

To proactively manage this risk, forward-looking programmes should review their compliance and supervision policies and procedures to ensure that they account for the FCA’s guidance, and that the four pillars of a robust compliance programme are fit-for-purpose.

Anyone involved in a client engagement programme (marketing, compliance, sales) can utilise the questions below to assess the readiness of their existing programme.

  • Policies
    • Have you outlined acceptable behaviour as it relates to electronic communications?
    • Have you defined which channels (SMS, social media, instant messaging) are permitted, and by whom?
    • Do you have a procedure in place to periodically review and update your policies as needed?
    • Is your senior leadership involved in the sign-off of those policies?
  • Content
    • Do you have controls in place to ensure you’re distributing only fair and balanced (not misleading) content?
    • Do you have a way to monitor for recommendations that may not be appropriate for either content or audience?
    • Have you held training sessions with your employees on policies, including recording attendance?
  • Supervision
    • Have you assessed your pre-approval and post-approval breakdown of financial promotions to ensure appropriateness for your business model?
    • Do you have lexicons in place that block or flag problematic content?
    • Are there people in the approval workflow with the requisite training and/or experience?
    • Does your Senior Management have sufficient insight into your electronic communication regime, including social media or text messaging, to satisfy their Duty of Responsibility under SMCR?
  • Archiving
    • Are you capturing all of your social media posts, profiles, and audit trails for each step during the approval workflow?
    • Are they being stored in a way that is consistent with the applicable regulations (e.g. durable media for MiFID-related communications)?
    • Do you have a way to reliably and quickly retrieve these records in the event that you need them?

While these are not the only questions that a Senior Manager should ask, they can lay the groundwork for an internal dialogue that reassesses your response preparedness. All firms should strive to understand the implications of this restatement, and enforce effective policies and procedures as part of their ongoing oversight. 

How Scale and Orchestration Can Help You Target the Right Prospect

This is part 3 in a series on the “Last Mile” of Digital Maturity. Read part 1 here, and part 2 on reaching and attracting the right prospect here.

Reaching and attracting the right prospects calls for a strong digital presence with credibility. Once that’s established, it’s time to to turn to scale and reach. At the program level, firms need to encourage repeatable behaviors that position advisors and agents to achieve sustained reach, while cultivating the mindshare required to attract business. 

But as social selling grows increasingly competitive—with more entrants and more sophisticated network algorithms—programs must help their users build and evangelize best practices. Firms in this stage of maturity can look closely at a few areas: weekly publishing targets, campaign subscription rates, and monthly new connection targets. (Learn more about which usage and impression indicators deliver scalable trends in our white paper.)

Improving Scaling and Consistency with Integration
Once best practices are in place, firms should seek to strategically integrate digital programs with their core technology. Key integrations improve ease of use and can improve field efficiency and productivity. For instance, at Hearsay, we’ve partnered with firms to:

  • Centralize social, websites and web listings management into a single workspace. A consolidated offering across these channels ensures consistency and boosts SEO.
  • Configure websites to capture contact/lead information and integrate with CRM or other lead management platforms. This allows for more seamless, authentic lead engagement by accurately assigning leads to the appropriate advisor/agent for follow-up.
  • Sync texting programs with CRM to make contacts more accessible and accelerate usability and adoption. This also allows for the capture of last-mile interaction data.
  • Evolve compliance programs to ensure risk is accounted for as your digital efforts scale. Properly managing compliance risk requires regular assessment of the compliance strategy, fine-tuning of policies & procedures, and technology.

Integrations like this pave the way for firms to further optimize their efforts.

Orchestrating the Optimal Approach
Of course, reaching your audience is only half of the equation; you also need to attract the right clients into your funnel. This is easier said than done, particularly when your advisors and agents have other responsibilities beyond new business generation. 

To optimize the funnel and attract the right prospects, mature firms are taking steps like the ones below to become increasingly targeted in their approach. 

  • Social campaigns can be tailored by region, persona, or area of expertise to align more appropriately with your audience.
  • Web traffic click through rates and website attribution targets can measure the efficacy of your content and approach.
  • Daily active usage of technology is a strong indicator of results. Your field is more likely to keep coming back when they see tangible value.

Even after a target audience is captured, mature firms leave nothing to chance. They have a cohesive social and website experience that locks prospects in during the discovery phase and strategically routes leads to the appropriate advisor or agent in real time. They prescribe digital prompts to guide proactive communications, ensuring a consistent, authentic approach across the field. 

Deploying best practices in the field while integrating core technologies with a targeted approach can vastly improve scale and reach to your target prospects.  To delve into why this is so important, and some specifics around follow-up timing (it’s everything), download our white paper on“Last-Mile Digital Maturity.

Reaching & Attracting the Right Prospect

The First Step in Developing Last-Mile Digital Maturity

As we shared in our first blog post of this series, a new phase of digital maturity is underway. Transformational financial services firms are proactively orchestrating how the field engages with clients in the “last-mile” and guiding seamless handoffs between channels to deliver business outcomes.

Guiding your field to deliver outcomes at scale is difficult. It takes time to set up the right framework, mine the data, and leverage technology to scale efforts across a distributed network of advisors and agents. COVID placed immediate pressure on firms to rethink service offerings and accelerate digital adoption; these changes will be entrenched amongst the most digitally mature.
But transformation doesn’t happen overnight: The first step in the digital maturity journey is building the consistency and scale needed to cultivate brand awareness and acquire leads.

The Building Blocks of Reach & Attract

In this age, a credible digital presence and robust social media profiles are table stakes for advisor and agent validation. Recent research shows it takes less than two-tenths of a second for an online visitor to form a first opinion of your brand once they’ve seen your profile or website. Not surprisingly, consumers frequently visit a number of sites to conduct research on financial services decisions. Prospects in an investigative phase will gravitate toward advisors with a strong digital presence. Think of it this way—would you go to a restaurant that wasn’t reviewed online?

How can firms help their teams meet this demand? It starts by building a strong social presence across the corporate brand and the field. Tapping into the network effect of social media, firms can reach a wider range of clients and prospects across demographics and regions. But credibility is key: In our analysis, advisors and agents with professional-quality profiles are 7x more likely to be called for a referral.

A cohesive strategy around social and web programs helps drive leads and increase conversion rates – that’s why it’s critical to empower your field with personalized, content-rich and SEO-optimized websites. Leads in financial services are predominantly sourced at the individual level, so a firm’s ability to deliver their field personalized websites at scale, while remaining aligned with corporate messaging, can promote a seamless client journey that captures leads while maintaining a consistent and rich brand experience.

Establishing Digital Credibility

In working with enterprise clients over the past decade, we’ve found a few consistently clear indicators for social media presence success:

  • Personalized, content-rich and SEO optimized websites for >90% of field teams.
  • At least 75% of the field has a complete social media presence. This includes: a professional photo, branding, and information detailing areas of expertise.
  • At least two major social networks are activated. While firms may gravitate toward a particular network, embracing the flexibility to connect with customers on their preferred network—which may be Instagram—is important.

These measurable steps to establishing digital credibility are the building blocks for achieving the consistency and scale needed to build your brand and acquire leads.

Attribution and Measurement

You’ve no doubt heard that what gets measured is managed. Yet one metric that is often underutilized is click-level attribution, which allows firms to evaluate the effectiveness of content, segmentation, and users, as well as assess ROI.

With Hearsay’s URL Attribution tool, firms can tag social media content with unique UTM codes to monitor inbound website traffic from social media down to the hierarchy, user, and content level. This can then be compared to organic, paid and referral traffic, and assigned a tangible ad equivalency value.

For one Hearsay customer, this level of data granularity underscored a significant increase in social traffic, and click-level attribution is now consistently a top driver of overall web traffic. This has had a tangible business impact—alongside their single customer view (a consolidated database which ingests information from their CRM, email and website analytics), social analytics help drive a deeper analytical understanding of their investor base. For instance, they now know prospects arriving on their website from social are more likely to invest than those arriving from other channels.

Supervision to Mitigate Risk

Finally, to mitigate risk and, where necessary, properly supervise client engagement activity, channels need to connect with a platform that allows for scalable monitoring, supervision, and potential remediation of client engagement activity. An essential building block for any digital engagement program is a framework for risk mitigation. When client engagement channels are connected to a unified supervision platform, your teams have a single platform to review multiple channels, streamlining efforts so they can focus more effectively on risk control.

With these foundational pieces in place, mature firms are integrating core technologies to build economies of scale and reach even more clients and prospects.

Next time, we’ll take a look at achieving scale and consistency in the reach and attract phase of lead generation and client engagement. And just like last week, if you can’t wait to learn more, download the full white paper now.

Stop the insanity! What financial services firms can learn from the GameStop frenzy

Accessing—and acting upon—financial advice seen on social media platforms is nothing new. But not until the recent trading frenzy around GameStop has this new reality come under sharp scrutiny. After retail investors on a Reddit discussion board drove an astronomical increase in stock value, GameStop stock is now sharply falling. The resulting volatility has led to a market valuation swing of over $30 billion for the company in just this year.

The potential for outsized risk and high-stakes consequences resulting from crowdsourced actions born on social media platforms has never been more apparent. And while the reputation risk for firms that must oversee advisors’ social media behavior has always been a concern, the legal risk is real as well.

To protect themselves and their advisors on social media, financial services firms can implement three key steps:

  1. Communicate a clear social media strategy for personnel. This should include how and what channels they can use, the content they can publish—including which original content or corporate-provided content they may modify—and what supervision process they need to undergo. Additionally, the policy should address firm expectations pertaining to the use of social media during non-business hours, any prohibited use-cases, and include the repercussions of not abiding by the policy.
  1. Employ automated supervision workflows to review advisor-created content prior to posting. This can be made more efficient by using a tool like Hearsay, which surfaces and remediates sensitive communications via an AI-powered alert system, so that supervisors can focus on high-risk violations. 
  1. Test adherence to the policy. In addition to having advisors attest to their understanding and adherence to the social media policy, firms should implement a program to test that social media usage aligns with the policy.

One takeaway from the past few weeks is that there continues to be a huge desire for financial advisors and their clients to connect and communicate using social media. At Hearsay, we saw a 24% increase in advisors actively using social media across our platform in 2020 vs. 2019. And a 2020 advisor survey by Putnam Investments found that 9 in 10 advisors say that not only has social media changed the nature of client relationships during the pandemic, but that this change is here to stay. Given the potential impact to an organization’s reputation and the viral nature of this medium, firms need to establish and secure proper guardrails in order to support and enhance the connections enabled by social media, while minimizing the risks.

Cut through the clutter and get business done with Hearsay Relate

Last year’s global pandemic put every business to the test, and TechGirl Financial was no exception. Victor Gaxiola and his wife Kim had worked in financial services since 2004, but together, they established TechGirl Financial in 2011 to serve a specific niche market: women in technology. Although the pair have always run a digital-first operation, the past year created unanticipated opportunities along with new challenges.

In a recent fireside chat with Brittany Nevares, Customer Marketing Manager at Hearsay, Victor described how the pandemic surfaced new client trends that paved the way for deepening connections during a time of uncertainty. Specifically, Victor shared how he leveraged Hearsay Relate—which enables secure, compliant texting—to nurture more intimate relationships with his clients.

As everyone conditioned themselves to habitual use of new technologies (Zoom much?) to get work done and maintain personal relationships, Victor encountered a double-edged sword.

With a decreased need to be local, geography was no longer an impediment to acquiring new business. “Technology allowed us to open our business to everyone, so that we weren’t limited to the Bay Area, but could also take on clients in North Carolina and Texas as well,” said Victor. However, this meant that his local client base was at risk of being courted by advisors outside his area. Nevertheless, he feels that while the rise of video conferencing afforded clients more selection and variety, it forced advisors to innovate, in order to stand out from the crowd. “This is where a niche focus like women in technology helps us differentiate our practice,” added Victor.

Zoom was a good proxy for client onboarding and reviews in the absence of face-to-face meetings, but to communicate regularly in between Zooms, Victor found that Hearsay Relate integrated seamlessly into his new business model, helping to drive deeper relationships.

“Relate was a game changer in terms of enabling us to make an intimate connection with clients and cut through the clutter,” said Victor. “Every day we’re bombarded with emails and marketing messages, but when it comes to texting, we’re a bit more selective as to who can text us and who we’re willing to respond to.”

Below, Victor shares three of his best practices for Hearsay Relate:

Effectively manage business and logistical transactions

Whether it’s appointment requests, confirmations, reminders, or signature requests, Relate helps you bypass an overflowing inbox to get transactions completed. “If you send a DocuSign request, there are times when the email is ignored; but send a text reminder through Hearsay Relate and it gets done,” said Victor.

You can use Relate to pre-program anything that’s logistical in nature. You can also plan for paperwork or administrative tasks in advance; for example, if there’s anything special that your client would like covered in a meeting, you can send information or pre-work ahead of time, to be better prepared.

Stay on top of your clients’ personal celebrations and milestones

Fortunately, you can also integrate Relate with an existing CRM to pre-program personal texts like birthday greetings, anniversaries, holidays etc., with Relate. Victor likes to get creative with birthday messages, by scheduling a morning greeting embellished with an emoji or image. These small touch points help nurture more intimate connections.

“It’s easy for anybody to understand how Relate helps from a communications and logistics standpoint,” said Victor. “But one day, we received a photograph of mountains and streams from a client in Colorado, who was out on a walk. This kind of unsolicited sharing enriches our relationship with our clients beyond the business,” added Victor.

For him, it’s a two-way street: The business of finance is personal, so it’s important to establish trust with who you’re working with. While he can share endless social posts related to finance, if Victor takes a photo of his dog or cat and refers to them as “the intern,” he gets much more engagement. “The human side—and the humor—goes both ways, and the more we do it, the more we get it back,” he noted. Many of Victor’s clients become a part of his and Kim’s personal lives, which he feels is an unforeseen benefit that Relate has brought to his business.

Establish communication best practices early on

When it comes to communicating with clients, Victor distinguishes between social media (used for scale) vs. Relate (used for 1:1 exchange). Depending on one’s book of business, it’s important to strike a balance between managing time and being efficient. With top clients, Victor ensures that he’s using Relate to reach out no less than once a month; some clients are on a weekly cadence. 

Because three people on his team use Relate (himself, Kim and an Operations Manager), he uses a single Relate number, so that everyone can be in on the conversation. Relate allows users to assign a delegate, so it’s easy to see who’s responding and when. His team includes initials with each text response, so that even clients know who at TechGirl Financial is responding.

As the battleground for client attention continues to evolve, Hearsay Relate helps Victor and the team at TechGirl FInancial “get right to the point without any fluff,” while nurturing more authentic, personal client connections.

A huge thanks to Victor for sharing his insights and best practices for Hearsay Relate with Brittany!