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The Future of Wealth Management: 4 Insights From BlackRock Leadership Event

As part of my role as founder and CEO of Hearsay Social, I have the pleasure of traveling all over the world to meet with prominent leaders in the industry, learn what’s keeping them up at night, and discuss how Hearsay Social can help them succeed amidst an always-changing business and regulatory landscape.
081 183A0302I recently attended BlackRock‘s Leader to Leader event and participated in a panel titled “The Evolving Investor Experience” moderated by Salim Ramji, head of U.S. Wealth Advisory at BlackRock. It was an honor to speak alongside John Thiel, Head of Merrill Lynch Wealth Management; Mark Tibergien, CEO of Pershing Advisor Solutions; and Bill Harris, CEO and founder of Personal Capital.
We had an insightful dialogue on the future of wealth and asset management and, over the course of the event, it was clear from the speakers and the 100-plus wealth management leaders in attendance that four key issues were – and continue to be – top of mind for the industry:
1. Productivity pressure
Roboadvisors and, in the U.S., the imminent Department of Labor ruling – in which it’s expected to call for greater transparency into how advisors are being paid in fees and product commissions, including adopting a uniform fiduciary standard – are putting the pressure on advisors to deliver more value to clients.
Advisors can only do this by embracing technologies that free their time to focus on the human, emotional aspects of helping coach clients through tough life decisions. Two of the most time-consuming aspects are asset allocation and business development. Overall, the consensus from the C-suite is that there are big opportunities for advisors to leverage automation and productivity tools to help them recapture some of that time.
2. Democratizing advisor access
Data shows millennial clients want both access to do-it-yourself online account management tools and access to a human advisor. Where it wasn’t cost-effective for advisors to serve long-tail clients before, technology has made serving this market much more efficient. Roboadvisors are fine in a bull market, but data already is showing roboadvice clients pulling their money out at the wrong time. This is especially important since most Americans aren’t saving for retirement, or don’t know how, and – based on the math – there’s no way Social Security will be able to support millennials when they retire.
3. Regulatory tsunami 
There are a growing number of regulators and regulations (SEC, FINRA, Department of Labor, CFPB, IRS, CFTC, OCC, state regulators) that are competing with one another to see who can issue the most laws and establish greater jurisdiction over the industry. This instability is a real concern for small and big firms alike who must stay ahead of and navigate more and more regulations.
4. Demographic misalignment
The median advisor is in his mid-50s and male, but the overall client demographic is shifting increasingly toward females and millennials. Industry executives concur that there’s a huge need for tools and technology to reach, recruit and retain a more diverse advisor force in order to stay relevant in the digital age.
While the challenges are very real, there’s also an incredible sense of enthusiasm and optimism. Every firm I’ve talked to has made clear that their focus is on staying relevant to clients, meeting the preferences and expectations of the increasingly omnichannel consumer, and improving productivity. The entire team at Hearsay Social looks forward to delivering the innovation that will ensure the growth and success of our customers, partners and the entire industry.
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Disrupting the buyer journey at the Digital Marketing for Financial Services Summit

Digital Marketing SummitLast week we participated in the first Digital Marketing for Financial Services Summit held in New York. Although the organization has held successful events in Canada, this was the first time it had brought the Summit to the U.S. as well as the first time that Hearsay Social participated as a sponsor.
The two-day event focused on challenges, opportunities and trends facing marketing professionals in financial services. Attendees representing wealth management, asset management, banking and insurance heard from industry thought leaders, influencers, and their peers in a number of sessions covering everything from 2015 trends to social media to gamification. Zeroing in on the marketer’s experience, the Summit brought to light the value of digital technologies to promote the brand and build awareness. Compared to other conferences I’ve attended, I found the conversations and themes more macro and strategic than tactical and field oriented.
Here were some of the main themes from the Summit:

Disruption

The key word of 2014 and this summit was disruption. It’s become clear to marketers today that the increased volume of potential marketing channels is challenging the way brands position their products and services to address their market. With the increasing number of mediums, cutting through the clutter of white noise is getting more and more difficult, and attracting consumer attention is requiring more creative approaches.
In his presentation, “Blending Heritage and Innovation,” Bryan VanDyke (Executive Director, Head of Digital Strategy, Morgan Stanley) shared that digital disruption shows no sign of slowing, affecting everything from how we buy travel and pay our bills to how we consume media (newspapers, music, movies, and television). The financial services industry will not be immune to these digital disruptions and are being challenged to adapt.  He suggested that firms consider adjusting by providing the following:

  1. Global presence: Be everywhere, always on, on all devices, service all needs.
  2. Be personal: Be relevant, actionable, and clear respective of your audience.
  3. Be insightful: Be thoughtful, holistic, visual and easy to grasp.
Hearsay Social booth at Digital Marketing Summit
Michael Gardineer manning the Hearsay Social booth at the Digital Marketing for Financial Services Summit

Digital is not just about technology

Digital is not just about technology because it’s more importantly about building connections with your customers. Firms getting caught up in technology challenges are overlooking the value in establishing a strong strategy first and then proceeding with a methodical approach that’s aimed at strengthening relationships.
In his presentation, “Strategy Considerations for Digital Marketing Transformation and Innovation in Financial Services,” Bill Barrett (Managing Director and Global Head of Digital Marketing, BNY Mellon) challenged participants to be disciplined in their digital adoption, and suggested 10 tips to follow:

  1. Develop an achievable strategy
  2. Ensure executive sponsorship
  3. Socialize with key internal stakeholders
  4. Seek out advocates in all areas of the company
  5. Listen to your audience
  6. Start from scratch if necessary
  7. Avoid “design by committee”
  8. Don’t believe everything you hear
  9. Don’t take on too much at once
  10. Keep experimenting

In essence, Bill provided a blueprint for the process marketing teams should follow when carefully adopting digital strategy: note, for example, that he specifically says in step one to develop an achievable strategy, taking into account the challenges an organization may have at the onset wanting to tackle too much at once.
Bill also reinforced how marketing teams must be mindful that their strategy needs to be flexible and nimble in order to adapt to changes recommended by consumers and internal stakeholders. If your brand is everywhere, especially in the minds of your consumers, you might as well take advantage of that by listening to their feedback and experimenting.

Alicianne RandThe buyer journey

Consumer buying behaviors are changing, and the products and services they buy are being influenced more and more by marketing and front of the funnel activities. In her presentation, “Content Marketing for Financial Brands as Publishers,” Alicianne Rand (VP Marketing, NewsCred, @aliciannerand) shared how content is core to who we are and how we live our lives. On average, we are exposed to 5,000 marketing messages every day, and we are being conditioned to tune out the noise. When you consider that only 0.01% of banner ads are ever clicked and 85% of TV ads go unwatched, how can you compete for the attention of consumers?
The fact is we choose what matters and is relevant to our lives, and today 70% of B2C and B2B purchase decisions are made before a buyer even speaks with a sales representative, according to Alicianne. As a result marketing departments are taking on more responsibility and accountability in the buying journey than ever before.
To cut through the noise, marketing departments must modify their approach with social media and other scalable digital technologies to personalize the experience and make the content more relevant to the individual consumer. Alicianne suggested that we challenge the old way of doing things with a new approach:

  1. From brand-led to value-driven: It’s all about consumers’ needs and the value proposition the brand can provide. Don’t constantly talk about who your company is and why it matters; instead position your products and services around the challenges they solve and the time or money it saves.
  2. From ad campaigns to always-on brand newsrooms: The 24/7 digital cycle is forcing brands to let go of traditional campaigns and instead leave the digital door open at all times. This is especially true for global brands that have consumers in every time zone. Social is always on, so having a presence isn’t enough if you don’t have the resources to support the ongoing conversation that is taking place. Airlines have been some of the fastest to adapt to their global customer needs both in availability and support in real-time
  3. From demographics and target audiences to the individual: Access to big data and insight data is making it easy for the brand message to be personalized to the individual needs of consumers as opposed to the general messaging to a single demographic. Targeted digital advertising platforms such as Facebook Ads has made this process much easier leveraging the data users provide to provide a more laser-focused delivery.

To conclude, we are undergoing a digital transformation that is affecting how we market and position the value that brands add to the market and to individual consumers. This is forcing brands to question their traditional methods and embrace the opportunities that digital technologies provide to connect with the right customer, at the right time, with the right message.
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Survey: 66% of advisors report social media has helped them gain new clients

The number of financial advisors who are gaining new clients through social media is growing, according to a survey released by Putnam Investments today.
In the 2013 Putnam survey, 49% of advisors using social media for business indicated that social media had helped them gain new clients. This year that number is up, with 66% of advisors reporting that social has helped them gain new clients.
Putnam Investments 2014 Social Media Survey
The size of the new clients advisors are gaining through social media is growing too. This year, 39% of respondents who reported gaining new clients through social media gained new assets of more than $1 million, with an average gain of $5.5 million. The median booking was almost $2 million in new assets, close to triple the level reported by the 2013 respondents.
It’s also interesting to note that while the business value of social media is becoming more evident for advisors, the percentage of advisors using social has not grown year-over-year, remaining steady at 75% of respondents. LinkedIn remains the top network for advisors, with 64% of advisors reporting that they use the professional social network.
The survey also shares some interesting demographics: women and advisors under 30 are the most likely to use social networks for business. Wirehouse advisors are using social media more than independent advisors or RIAs and are the most likely segment of advisors to gain new clients.
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To learn more, check out the Putnam Investments 2014 Social Advisor Study.
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Ignore, innovate or die: A new era for financial services firms and advisors

At the recent LIMRA Annual conference, innovation and opportunity took center stage. The theme of this year’s conference was “The Leadership Challenge: Connecting in a Distracted World,” highlighting for executive-level conference attendees the importance of evolving their firms to grow their business in today’s digital era.

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Left to right: Joe Monk (State Farm), Rand Harbert (State Farm), Bob Kerzner (LIMRA), Clara Shih (Hearsay Social), Michael Lock (Hearsay Social), Scott Davison (OneAmerica), Rino D’Onofrio (RBC Insurance), and Kenny Massey (Modern Woodmen).

Presenting at the conference were industry speakers and moderators including Scott Davison (President and CEO, OneAmerica), Joe Monk (chief administrative officer, State Farm Life), Bob Kerzner (President and CEO, LIMRA, LOMA and LL Global, Inc.), Kenny Massey (President and CEO, Modern Woodmen of America), Deanna Mulligan (President and CEO, The Guardian Life Insurance Company of America), William Wheeler (President, Americas, MetLife), and Larry Zimpleman (Chairman, President, and CEO, Principal Financial Group), as well as external speakers including Lou Gerstner (former Chairman and CEO, IBM Corporation), Clara Shih (Founder and CEO, Hearsay Social), David Plouffe (SVP for Policy and Strategy, Uber), Don Yaeger (President, Greatness), and Jason Dorsey (The Gen Y Guy, The Center for Generational Kinetics).
Speakers focused on a few key consistent themes throughout the conference:

Adapting to changing demographics

One trend that fueled the topic of change was Millennials. According to LIMRA studies, 37% of Gen Y are unemployed, marrying later, and less likely to trust firms and individuals. In spite of all that, Millennials are more likely to buy life insurance than any other generation. They represent 80 million individuals spending $1 trillion in the US alone, 70% of whom want to learn more about financial education.
Conference speakers such as Bob Kurzner, David Ploufe and Jason Dorsey recognized that this segment of consumers represents a huge opportunity for financial services firms – especially their advisors, but that Millennials are going to buy differently than Boomers.

Adapting to the new buyer journey

Reaching Millennials will require very different methods than past tactics of “smiling and dialing.” For example, Millennials will decide to refer individuals and professionals they trust based on their Facebook and LinkedIn profiles. In addition, Millennials consider phone calls an invasion of privacy, preferring engagement via text, email (only reading the subject line, of course), and social media.


Millennial buying drivers also differ, requiring financial education about different topics than their parents. According to Deanna Mulligan of Guardian Life, Millennials seek a secure platform for paying off loans and/or taking care of parents as opposed to buying a home and saving for the college education of their kids – more traditional priorities from the past.

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Left to right: Bob Kerzner (LIMRA), Deanna Mulligan (Guardian Life), William Wheeler (MetLife), and Larry Zimpleman (Principal Financial Group).

The implication is that advisors need to adapt to consumer changes – both in how they engage and where they engage.

Adapting to technology

With the rapid emergence of cloud technology, mobile devices, and social media over the past several years, consumers – and not just Millennials – now expect different things from businesses. The conference highlighted key technologies that require advisors to adapt to stay relevant in the digital era:

Social media, mobile, & big data

Kicking off the conference, Bob Kerzner highlighted how industry firms need to enable agents to be authentic and engage as individuals, not as brands, especially since the financial services industry is among the least trusted industry (per a recent Gallup survey). Deanna Mulligan also said that social media is required to be where clients are and that social media is key to engaging with clients. Larry Zimpleman agreed and offered that, for the middle and upper income clients, there are primarily two locations to reach potential retail clients: in the workplace and on social media.


The good news is that, based on a LIMRA study earlier this year, 93% of life insurance companies now have social media programs in place vs. 55% in 2010. 70% of surveyed life insurance firms now have a social business program for their advisors.


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Clara with Kenny Massey (Modern Woodmen) on the main stage at LIMRA Annual.

Clara Shih, in her presentation, “The Future of Distribution and Marketing – Staying Relevant in the Digital Era”, discussed how today’s consumers and customers have vastly different client expectations than those from the past. This has primarily been driven over the past five years by rapid growth of technology acceptance, from the Internet to mobile devices to social media. This expectation isn’t driven by competitors in the financial services industry, but rather by the likes of Amazon, Starbucks and Uber.
Clara also highlighted for the audience how social media addresses three key challenges that the Life Insurance industry faces today, including (1) changing client expectations, (2) an aging agent force coupled with the generational gap between agent and new clients, and (3) an outdated distribution model that needs to increase productivity at scale.
Finally, Clara challenged the leadership in the room to innovate beyond social within their firms, revealing the opportunity to enable a true omni-channel experience for clients as well as the opportunity to leverage technology for information discovery, data mining, and informed interactions to simplify the customer experience from signing up to underwriting to customer service.
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Clara with Kenny Massey (Modern Woodmen) on the main stage at LIMRA Annual.

With today’s big data & predictive analytics technology being more business-friendly along with the right models and data specialists, the industry has the opportunity to apply behavioral economics and data mining to better understand their clients.
In closing, Shih offered three final actions that leaders can take to lead their organizations for success in the digital age:

  1. Commit as management
  2. Incorporate into business process – training, prospecting, etc.
  3. Let early adopters do the talking

Like other industries, the financial services and insurance industry has three choices: ignore these trends and opportunities, innovate, or die. Clearly, the sentiment during and after the conference was that life insurance companies must embrace technology, adapt and integrate this into their training and internal processes, and enable their advisors to engage their clients at scale through technology, strong leadership, and innovation partners.
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