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The DOL Ruling: 3 Implications for the Advisor-Client Relationship

shutterstock_70550545The Department of Labor (DOL) has finally redefined who will be held to the “fiduciary standard” concerning retirement investing advice and how it’s applied. Yesterday’s long-awaited ruling—which requires registered investment advisors, brokers, and insurance agents (collectively “advisors”) to act in the best interest of their clients—has huge implications that will affect the advisor-client relationship for years to come. Here are three of them:

1. Advisors must learn all there is to know about their clients in order to better serve them

With the new ruling, it will become increasingly critical for advisors to discover all there is to know about their clients and put their clients’ need and wants front and center. Doing so will allow them to give better investment advice while upholding their fiduciary duty. This includes using “next-generation tools” such as social networks and digital aids to cultivate relationships and facilitate ongoing communication through the sharing of tailored content and thought leadership.
Additionally, advisors must provide differentiated value at low cost to better serve their clients in light of greater transparency into how they are being paid in fees and product commission. The greater value advisors provide, the better prepared they’ll be to recommend investments that are in their clients’ best interest.

2. Advisors must embrace technology in order to deepen relationships and increase productivity

Technology will play a big role in how advisors reach and engage with clients as well as boosting their day-to-day productivity. Hearsay Social CEO and founder Clara Shih has spoken about this many times before, including at a 2015 BlackRock leadership event focused on the future of wealth management. She discussed the need for advisors to deliver more value to clients amidst greater productivity pressures by stating:

“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.”

3. Firms must leverage technology that enable advisors to better attract, engage, and keep high-net-worth clients

To compete under the new rules, advisors will need to cast a wider net in order to attract and keep high-net-worth individuals (HNWIs). Millennials, in particular, which represent a growing group of HNWIs under the age of 40, offer significant opportunities for advisors. According to the 2015 World Wealth Report, these younger investors prefer to use mobile phones, tablets, and other mobile devices for nearly all their information, transactions, and interactions. By leveraging technology, firms can enable their advisors to attract and keep this sought-after segment.
There is no question that the new DOL rule will have a big impact on advisors who are currently managing 401(k) plans and advising on individual retirement accounts. As we dig deeper into the new ruling, we will continue to keep our customers abreast of how these changes will unfold.
One thing is certain: It’s more important than ever for advisors to leverage technology to learn all they can about their clients and share thoughtful recommendations across their clients’ and prospective clients’ preferred communication channels–both online and offline.
Above all else, the DOL ruling serves as a loud wake-up call for advisory firms to adjust their business models to meet the new fiduciary standard, and the extended grace period will allow firms ample time to do so.  
Be sure to follow @HearsaySocial for ongoing dialogue and insights around the DOL ruling.
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#HSonAir Bonus Episode: The DOL Fiduciary Rule

DOLThe release of the long anticipated DOL Fiduciary Rule is certain to be a topic of discussion and debate in the days and weeks to come as the industry digests the final ruling and interprets its effect on the industry.
In this bonus episode, we share a short audio segment from a recent compliance webinar with Yasmin Zarabi, Vice President of Legal and Compliance at Hearsay Social and Stephen Selby, CRCP, Assistant Vice President of Social Media Strategy, Audit & Regulatory Relations at LIMRA with thoughts on the DOL Ruling potential impact on social media and digital technology in Financial Services.
We invite you to be part of the conversation with @victorgaxiola and @alissadossantos on Twitter using hashtag #HSonAir.  If you have a question, comment or suggestion, please send an  e-mail to   We also invite you to “like” our podcast page on Facebook where we share posts about the podcast, our guests, and other fun stuff.

Compliance for the Financial Services Industry in 2016 [WEBINAR REPLAY]

Thanks to all that attended our #HScompliance presentation on social media compliance for the financial services industry. Please find the webinar replay below as we share the latest compliance research and best practices collected from our client and member firms, and what financial services firms need to be aware of in 2016.
In this 45-minute webinar, moderated by Victor Gaxiola, Sr. Customer Advocacy Manager at Hearsay Social, you’ll hear from Yasmin Zarabi, Hearsay Social’s VP of Legal and Compliance, and Stephen Selby, CRCP, Assistant VP of Social Media Strategy, Audit & Regulatory Relations at LIMRA as they discuss:

  • The current state of digital technologies in financial services
  • FINRA retrospective rule review
  • The DOL’s pending fiduciary rule and its potential impact to social media
  • Compliance-enabled text messaging programs for advisors

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Listen to the webinar replay, or view the slide presentation, to learn how financial services firms are shifting to an omnichannel customer experience and a culture of compliance. Continue the conversation at #HScompliance
To learn more about Hearsay Social, visit
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5 Themes from SIFMA's 2016 Social Media Seminar

Social media is transforming the advisor-client relationship in very significant ways, from enhancing client services to enabling advisors to authentically communicate with clients and prospects. This year’s SIFMA Social Media Seminar, which aptly took place in the heart of San Francisco’s financial services district on February 25, brought together over a hundred professionals and thought leaders in wealth management, marketing, compliance, and social media to explore how to maximize the use of social platforms amidst an ever-changing regulatory framework. Here’s a look at some of the key themes that emerged throughout the day. 
Regulations and the future of wealth management are top of mind
Our own Founder and CEO Clara Shih (@clarashih) kicked things off during a fireside chat with John Taft, CEO of RBC Wealth Management-US (@RBC), to discuss the role of social media and digital technology and what that means for the wealth management industry. At the onset, they discussed the impact the Department of Labor’s proposed fiduciary rule might have on advisors and brokers, emphasizing that advisors must continue to add value by embracing technologies and delivering information when, where, and how consumers want. 

Clara shared an engaging slide that illustrated the ways today’s clients want to engage with advisors–both online and offline–setting the tone and thought leadership that became an integral part of the discussions throughout the rest of the day.

Social business is everybody’s business

In a lively panel presentation on the importance of integrating social media into corporate and financial advisor communications, Sunayna Tuteja (@sunaynat), Director of Social Media and Online Communities at TD Ameritrade, gave everyone a stark reminder that social business is everybody’s business, and social media can no longer be disassociated from a company’s overall marketing strategy. As we’ve often said before, instead of relegating social media to a social media marketing intern, for example, companies must “move social media out of silos and into total integration,” as explained by Dan Greenberg (@dangb), Sr. Account Executive of Financial Services at Twitter, during another panel discussion. 

Consumption shifts will expand into mobile and video platforms

LinkedIn’s Head of North America Financial Services Marketing, Menaka Thillaiampalam (@menakathill), along with Twitter’s Sr. Account Executive of Financial Services, Dan Greenberg, and DoubleDutch CEO and Co-founder, Lawrence Coburn (@lawrencecoburn), discussed some of the key trends facing the financial services industry, mainly centered around the consumer consumption shifts that are currently taking place. One major consumer trend is that the high-net worth market is growing and the way consumers process money will change. Menaka calls it a “societal shift, more so than a generational shift.”
Case in point: “71% of millennials would rather go to the dentist than listen to what their banks are saying,” says Menaka, according to a recent LinkedIn study on the mindset of affluent millennial investors. In reaching out to millennial investors, Twitter’s Greenberg advised the audience to make mobile–and even video–part of their marketing plans, stating that “mobile has doubled the time we spend online.” Moreover, the use of social media has boomed from 7% of individuals in 2010 to 65% today, he says. “And with those that have more than $75,000 of investable assets, the use is very high.”

The discussion moved to the topic of content and the need to focus on communications around social media and educational content. “75% of investors want their financial advisors to give them educational content online, and 35% of prospective clients turn to social media and other online platforms for advice,” says Menaka. “They are using social media to validate their choices, so thought leadership should be seen as a tactical or strategic step,” she said.

The power of the authentic voice (Hint: Create content that makes you seem human)

According to the presenters on the financial advisor panel, authenticity remains a critical means for communicating and engaging with today’s clients and prospects. The group discussed some of their most successful social media strategies for enhancing communication via social media platforms and highlighted how content that resonates is content that wins the day. For example, Karen Goodwin (@karenjgoodwin), a financial advisor at Ameriprise Financial, talked about her successful use of Facebook to promote a Mother’s Day event. Chris Norton (@RogersNortonWM) of Raymond James spoke about how social media allowed him to garner community support for an employee’s child who was participating in an important Little League series.  

Overall, social media allows advisors to grow their customer base with the right type of people.

Evaluate social media compliance in context

Last, but not least, our own VP of Legal and Compliance, Yasmin Zarabi (@yasminzarabi), along with Marc Gilman, Executive Director of Enterprise Legal at Morgan Stanley, and Michael Lisi, Director of Litigation Support at Fidelity Investments, ended on a strong note on a social media compliance panel moderated by Hardy Calicott, Partner at Sidley Austin. Yasmin reinforced to the audience and fellow panelists that compliance is still a large component of any digital strategy, but the rules are really not so black and white. In other words, context really matters. When you look and evaluate whether someone is doing something wrong, you have to look at the totality of the circumstances, she added. 

For information on how to boost social business across your organization, download our latest Hearsay Social Adoption Guide.
Check out our events page for upcoming event information, and please join us as we continue the conversation at #OmnichannelAdvisor.

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