Skip to content

RBC Wealth Management's John Taft Makes a Case for the Social Media Revolution

shutterstock_262230557When Hearsay Social first launched in 2009, the idea of allowing advisors and agents to have a social media presence for business was considered a huge risk for most financial services firms. But over the next seven years, we’ve witnessed a steady transformation in how the industry views social media and the opportunities, not just the risks, that social and digital present – especially as they face increasing pressure from the emergence of automated robo-advisor technology and regulatory changes.
John Taft, CEO of RBC Wealth Management U.S., makes a powerful statement about the social media mandate in his recent LinkedIn post, “Social Media: Friend or Foe?” In the article, he argues that the advisor-client relationship has changed radically thanks to social media, and that advisors who “keep their heads in the social media sand” will be threatened while those who embrace the “social media revolution” will see incredible opportunity.
John also provides his perspective on the recent SIFMA Social Media Seminar that took place here in San Francisco, where our CEO and founder, Clara Shih, hosted a fireside chat with him. Among other topics, they discussed the path of today’s customer journey and the role that technology plays, as well as why and how advisors must respond to the commoditization of the industry.
Read John’s full article here.
Related Posts:

5 Things Wealth Managers Must Do to Thrive in the Digital Age: Insights from the 2015 World Wealth Report

The rise of new technologies, as well as the evolving needs and expectations of high net worth individuals (HNWIs) – especially those under the age of 45 – has given much for wealth managers to ponder and, more importantly, act upon over the next several decades. According to this year’s World Wealth Report released by Capgemini and RBC Wealth Management, wealth managers must adapt to meet the challenges of an evolving landscape or risk lower client satisfaction levels.
New digital entrants such as “robo-advisors” and direct channel platforms will impact the wealth manager’s role in the coming years. The report highlights the need for delivering a differentiated value proposition, and offers things wealth managers must do to stay ahead. And while some forward-thinking financial services firm executives realize the importance automated services will play in asset management, there are some wealth managers who are skeptical. The below figure highlights select quotes from wealth managers and firms regarding automated advisory services:
Screen Shot 2015-07-30 at 12.05.09 PM
Given that two-thirds of HNWIs are likely to leave firms that do not allow them to transact digitally, as last year’s World Wealth Report pointed out, it is critical for wealth managers to embrace digital technology. This will require them to adapt their models and reevaluate their value proposition, including addressing the needs of a considerable number of new clients that hail from the millennial generation.
Below are five ways wealth managers can meet the needs and concerns of today’s digitally-enabled clients:
1) Deliver differentiated value to address the needs of a diverse client base
Wealth managers must understand how to best engage with complete households – from children and spouses to parents and grandparents – and they must do so by effectively using technology to stand out from the crowd. According to the report, providing a differentiated value proposition, including the “adoption of next-generation tools, such as social networks and digital aids, to facilitate communication” will be important.
2) Engage clients and prospects across multiple channels
The report highlights how traditional modes of communication between HNWIs and firms have evolved from face-to-face interactions to omnichannel experiences. We’ve spoken on the need for a consistent, personalized multi-channel presence before and believe seamless, consistent customer experiences that drive personalized communications across channels, such as digital, is imperative in a world of automated consumerism.
3) Understand the needs and approaches of younger HNWIs
Wealth managers must get serious about addressing the needs of millennials, which represent a large group of HNWIs under the age of 40 who will significantly drive demand in the digital age (view video below). In the U.S. alone, an estimated $59 trillion is expected to change hands from wealthy baby boomers to heirs, and nearly 70 percent of HNWIs under the age of 45 will conduct most or all of their wealth management functions through digital channels. This will require a strong digital presence to attract and retain younger HNWIs.
4) Invest in technology-enabled investment services from third-party firms to support efficient and cost effective services
In addressing client needs, wealth managers can outsource competencies and efficiencies to third-parties that are “highly complementary” to existing business models, while wealth managers continue to focus on relationship and trust building.
Hearsay Social is named in the report as one such company that wealth managers can leverage:
“One example of a third-party firm is Hearsay Social, based in Silicon Valley. Its Predictive Social Suite technology enables wealth managers to customize content and engage clients, particularly younger clients below 35 years of age, through its social media dashboard and mobile-first websites.  This can further help wealth managers negate the threat of disruptive players in the industry.”
5) Embrace digital technologies to enhance the client-wealth manager relationship
According to the report, successful wealth managers will leverage social, mobile, and digital technologies to enhance overall service delivery and client experiences for a variety of functions, including prospecting, risk management, and wealth planning. And at the end of the day, as  George Lewis, group head at RBC Wealth Management & RBC Insurance, points out:
“The most successful firms will be the ones that reimagine the value they bring to their clients to be more competitive. As firms navigate the changing market dynamics, it’s important that they keep an open dialogue with wealth managers, while developing the tools, guidance and resources to support their success.”
The World Wealth Report from Capgemini is the industry-leading benchmark for tracking HNWIs, their wealth, and the global and economic conditions that drive change in the wealth management industry. View the infographic and download the full report from their interactive website.
Below is a video highlighting the importance of engaging with younger HNWIs.

Related Resources:

For wealth managers in Asia-Pacific, digital, mobile, and social will be crucial to meeting client expectations

The same trends driving rapid adoption of mobile and social technologies in North America and Europe are not only playing a role in Asia-Pacific as well, but they’re actually even more impactful there.
Asia-Pacific Wealth Report 2014
For example, 82% of high net worth individuals (HNWIs) in Asia-Pacific (excluding Japan) expect most or all of their wealth management relationship to be conducted through digital channels in five years, in contrast to 61% of HNWIs in the rest of the world, according to the Asia-Pacific Wealth Report 2014 recently released by Capgemini and RBC Wealth Management. Not only that, but the study found that Asia-Pacific HNWIs across all ages and wealth levels will increasingly demand mobile and social technologies for interacting with wealth managers.
According to Jean Lassignardie (Chief Sales and Marketing Officer, Capgemini Global Financial Services, @jlassig):

“The risk of not getting digital right is high for wealth management firms in Asia-Pacific, as its high net worth individuals are distinguishing themselves as more digitally-minded than their peers in the rest of the world. Asia-Pacific wealth management firms will need to offer a deep, multi-channel experience that takes into account regional variations in order to meet these high expectations.”

Of course, social media is especially crucial to the younger generation. Over half of Asia-Pacific HNWIs under the age of 40 indicate social media as an important channel for their wealth management relationship. The Asia-Pacific wealth manager should share that perspective, especially since Asia-Pacific HNWIs are already openly sharing information about themselves on social networks, which will be a useful resource for the digital-savvy financial professional.
To further explore Asia-Pacific’s wealth management climate and how the digital movement will play a part, download the free 52-page Asia-Pacific Wealth Report 2014.
[relatedPosts]

The future of financial services at the Social Business Innovation Summit

Celebrating innovation, technology and social business, Hearsay Social last week hosted its second annual Social Business Innovation Summit in San Francisco, bringing together executives and thought leaders from across the financial services and technology industries.

Blog4
The Social Business Innovation Summit brought together the greatest minds across financial services and technology. Clockwise from top left: John Taft (CEO of RBC Wealth Management – US), Silicon Valley CEOs (from FutureAdvisor, Braintree, and Prosper), Bryan Schreier (General Partner at Sequoia Capital), Clara Shih (CEO of Hearsay Social), and Eileen McDonnell (Chairman, President & CEO, Penn Mutual).

hearsay-42
Hearsay Social President and COO Michael Lock with CEO Clara Shih.

hearsay-128
Clara Shih, Lee M. Gammill, Jr. (Retired Vice Chairman, New York Life, and Advisor to Hearsay Social), Scott Perry (CEO, Bankers Life), and J. Scott Davison (CEO, OneAmerica) at breakfast.

BnI5uyDCcAAMD1t

In attendance were CEOs, heads of sales and distribution, CMOs, and compliance officers, who packed Dogpatch Studios on Thursday morning to network, learn and understand the trends and themes that are guiding how people buy products and services as well as the opportunities and challenges driving financial firms to adapt.

Inspired by the rapid-fire, rousing talks given at TED conferences, the Summit provided those in attendance–and anyone following our Twitter hashtag #SBIS14–a front row seat into the future of technology and innovation and how businesses will survive and thrive.

See below for photos, tweets, and four key takeaways from the Summit.

Social media is about enhancing human capital, not replacing it

Kicking off the Summit, Hearsay Social CEO Clara Shih (@clarashih) shared how client expectations are changing, and technology is altering how consumers make buying decisions. Online sources today are key influencers in each purchase and consumers are conditioned to expect personalized service and an ability to communicate with brand on their own terms and with their own devices.

hearsay-65

Faced with an aging advisor population, the firms of tomorrow need to prepare to serve the next generation of investors and provide the tools to recruit the talent that will serve them. Technology scales and offers the ability to serve those previously unreachable, as it challenges and redefines existing models.

Client expectations are changing, and technology is altering how consumers make buying decisions. Online sources today are key influencers in purchases. Additionally, consumers are conditioned to expect personalized service and an ability to communicate with brands on their own terms, with their own devices, through their own channels.

Chris Andrews (Managing Director, Northwestern Mutual) and Karen Kehr (Financial Advisor, Ameriprise Financial) shared how they are using social media to grow, maintain and serve their base of clients in this new climate. Key to their success was the realization that many of their clients were already using social media platforms to network and connect. A personal and professional presence was a natural extension of their existing platform use, allowing them to convert friends into clients and find new opportunities through organic referrals.

hearsay-94
Chris Andrews (Managing Director, Northwestern Mutual) and Karen Kehr (Financial Advisor, Ameriprise Financial) in a conversation with Gary Liu (VP Marketing, Hearsay Social).

hearsay-78
Eileen McDonnell (Chairman, President & CEO, Penn Mutual) in a fireside chat with Hearsay Social CEO Clara Shih.

Establish a culture of innovation

Founded in 1847 in Philadelphia, Penn Mutual has seen its share of changes, and according to Eileen McDonnell (Chairman, President & CEO, Penn Mutual), the industry is in crisis. By the year 2020, over half of the workforce will be comprised of millennials, and financial institutions need to find a way to connect and add value to these consumers. The changing face of insurance means that firms need to broaden their reach to capture new talent, especially women and millennials.

This means firms need to employ tactical initiatives to address the change by choosing the right partners, embracing innovation, and stop making excuses.

“It’s not an either/or situation. People retreat to what is comfortable to them. It will tweak…but I do believe that there will be a next generation of advisor force that will operate very differently, and they will need to co-exist.” — Eileen McDonnell, Penn Mutual

Although Eileen admits that not everyone will be open to change, the next decade will show us new producers, as well as established ones co-existing to serve the market.

Embrace social influence with a human touch

On the advisor panel, Karen Kehr shared how she uses Facebook and LinkedIn to build brand awareness and connect with the multi-generational clients she serves. Through social media, she is able to connect on a personal basis with clients, getting to know their kids and grandkids, which makes the transition to new relationships and business easy.
Chris had a similar experience: recognizing that the financial services business is about high trust relationships, he understood that the ability to relate and share in similar circles makes it easier to grow a book of business based on commonality. Long gone are the days of using the phone to connect with new prospects and expect any kind of exchange, especially when people are avoiding their phones or not using them at all.

“The old models of calling people worked in the 1950s. The 40-calls-a-day model is now broken.  There is a lot of power in social, lots of information, and we need to keep it personal.” — Chris Andrews, Northwestern Mutual

Social doesn’t just help grow new business, but it also helps retain existing business. People will continue to work with advisors they trust and can relate to, and social makes it easier for people to understand who you are on a personal and professional level. It reduces the intimidation that one may feel working with a financial professional and makes clients feel comfortable and connected.

The dial-and-smile mentality is broken and no longer addresses how clients are making buying decisions. Karen concluded: “If you don’t have a presence, you don’t count.”

Joe Fernandez (CEO and founder of Klout, @JoeFernandez), whose software measures social influence and explores how people buy products and services, expanded on this idea during his presentation.

hearsay-134
Joe Fernandez (CEO and founder of Klout) tells the story behind Klout and the meaning of social influence.

People today don’t pay attention to ads or billboards like they used to, and consumers are using information from peers to differentiate and select products. We listen to our friends, not brands.

“84% of millennial say user-generated content influences what they buy.” — Joe Fernandez, Klout

The leverage and reach provided by social media has increased the power consumers have over brands to influence the perception of products and services. In the post-advertising world, we only care what our friends say, and the power shifts back to consumers. If you don’t recognize the power of the people, you are missing an opportunity.

As an example of one platform that empowers both individuals and brands, Ralf VonSosen (Head of Marketing for Sales Solutions from LinkedIn, @rvonsosen) shared how LinkedIn is helping professionals connect with current and prospective clients, making them more productive and successful.

hearsay-106
Ralf VonSosen (Head of Marketing for Sales Solutions from LinkedIn) talks the future of social networks.

In total, LinkedIn has over 300 million global members representing 300,000 jobs and billions of updates on a daily basis. They have built their platform to focus on three main areas:

  1. Identity: The resume is not as important as it once was when you can now use a digital resume that brings to life your professional background and the ability to create an online brand.
  2. Networks: LinkedIn continues to expand the growth of the network and talent pool available on a global basis.
  3. Knowledge: LinkedIn is quickly expanding as the definitive professional publishing platform, as evidenced by its acquisition of SlideShare, the growth of Groups and Pulse, and the expansion of its Influencer program.

At a high level, LinkedIn continues to define the role it plays in providing value to its members and continues to develop the platform to serve as an Economic Graph–a digital representation of the economy by connecting talent with opportunity at a massive scale and creating a capital of talent.

“The vision is to digitize this and then leverage this capital to where it can be more productive.” — Ralf VonSosen, LinkedIn

For users, this can only increase the value that LinkedIn provides its members, whether they are looking for job, a connection or new talent.

Resist naysayers and embrace disruption

Tapping into its Silicon Valley network, Hearsay Social was proud to present a unique panel of entrepreneurs–Bill Ready (CEO, Braintree, @williamready), Aaron Vermut (CEO, Prosper, @vermooti), and Bo Lu (CEO and founder, FutureAdvisor, @bolu)–who joined the Summit to share their views on entrepreneurship, technology trends in financial services, and how to succeed in the digital era. The panel was moderated by Amir Efrati (Senior Reporter, The Information, @amir).

hearsay-150
Bo Lu (CEO and founder, FutureAdvisor), Bill Ready (CEO, Braintree), and Aaron Vermut (CEO, Prosper), share their view of financial services innovation with moderator Amir Efrati (Senior Reporter, The Information).

Although each business is focused on a unique value proposition, they each share a common theme: disruption.

Whether it’s addressing the underserved masses with financial advisory services, micro-lending opportunities or new payment options, each company is challenging existing business models with ones that are meant to improve efficiencies and client experiences.

This is not unlike what social media is doing in financial services. It would be easy for advisors and firms to ignore the benefits of social media and hide behind the excuse of regulatory or compliance concerns.  As the panel of entrepreneurs pointed out, however, the changing consumer base is wired differently, and technology is making it easier to disrupt existing systems that have yet to evolve, echoing some of the same sentiments shared by Joe Fernandez of Klout and Chris Andrews from Northwestern Mutual.

John Taft (CEO of RBC Wealth Management — US) provided a different perspective on the disruptive challenge these new companies are creating. Like Eileen before him, John recognizes that the next generation investor’s mindset is different and that more established brick and mortar businesses need to adapt to serve this new consumer. But it won’t happen overnight. And not all consumers are the same.

hearsay-156
John Taft (CEO of RBC Wealth Management — US) in a fireside chat with Hearsay Social CEO Clara Shih.

Financial services continues to be a high trust, high touch business that demands a personal relationship. The average age of clients is in the mid-50s and their advisors are about the same. Businesses have been built around the trust that advisors gain through personal connections established at local golf clubs, associations and common interest groups. RBC Wealth Management – US, although progressive in its approach to social, is not looking to address the unseen client market. That being said, they are looking to explore the effect that digital technology is having on wealth management.

John challenged the notion that younger generations don’t like or use the phone because it’s really a matter of where you are in your life cycle. Life gets more complicated as you age, as do your needs. Professional advice is a premium and, the more complicated your life gets, the greater the need to have someone help you navigate through the tough decisions.

To this end, technology is both part of the problem and the solution. Although consumers today have access to more information and are perhaps more confident to make decisions on their own, it’s still a relationship business. Social media provides the avenue for shared values and ideas that ultimately make it easier for people to select the financial professional who is right for them.

Bryan Schreier (General Partner at Sequoia Capital, @schreier) agrees with John that Generation Y is unlikely to abandon their phones once their lives get more complicated.

hearsay-163
In the last session of the day, Bryan Schreier (General Partner at Sequoia Capital) and Hearsay Social CEO Clara Shih discuss the next decade of Silicon Valley with Adam Lashinsky (Senior Editor at Large, Fortune).

Sequoia Capital spends a lot of time listening to college-aged consumers. What they’ve discovered is that this generation has a “lean back” mentality and prefers to see things in their social streams. They are very willing to share — by taking photos, using Snapchat and sharing online. However, they also expect the brands and services to come to them–an important lesson in the high touch and high trust environment of financial services.

Today, in the age of information, strong relationship management matters, and those that embrace technology to scale both new opportunities and maintain existing relationships will have success. There is a premium in offering personal attention and nothing beats face-to-face; in fact, that’s why we hosted the Innovation Summit in San Francisco, not online via a Web connection.

We’d like to thank all of our clients, partners, speakers and panel members for joining us in San Francisco.  And thank you to all of those who joined us on Twitter using hashtag #SBIS14, as well as the Hearsay Social team who made it happen.

See you at the LinkedIn Finance Summit this Thursday (2/13) in NYC!

linkedin financeconnect

We are delighted to be in New York City this week, where our CEO Clara Shih will be sharing the stage with Royal Bank of Canada (US Wealth Management) CEO John Taft, CBS analyst Jill Schlesinger, Mohamed El-Erian, and a host of other finance industry and social business leaders at LinkedIn’s 3rd Annual FinanceConnect Summit.

This Thursday, following remarks from Penry Price (VP Global Sales, Marketing Solutions at LinkedIn, @PenryPrice), Mohamed El-Erian, and Allen Blue (Co-Founder, LinkedIn, @allenb), John Taft and Clara will participate in a keynote roundtable moderated by Jill Schlesinger (@jillonmoney). They will discuss the state of the economy, and in particular how disruptive technologies like social media have changed the way financial firms, advisors, and wholesalers must do business today and going forward.

financeconnect panel

Hosted by LinkedIn Marketing Solutions (@LinkedInMktg), FinanceConnect brings together leading executives from across the industry, including UBS, Prudential, Goldman Sachs, and American Express, as well as digital technology leaders from McKinsey and Hearsay Social.

Highlights from the pre-conference workshops on Wednesday include opening remarks from LinkedIn’s Jennifer Grazel (@jgrazel), as well as a session on “Social Selling” led by Dan Swift from LinkedIn Sales Solutions (@danjswift).

CEO Panel details for FinanceConnect:2014

WHAT: In an executive fireside chat, Jill Schlesinger interviews leading CEOs on FinanceConnect topics, including the global climate for finance, the role of innovation and disruptive technologies in financial services, and the impact of social media as a new communication paradigm.

WHEN: Thursday, February 13 at 3:00pm

WHERE: The Time Warner Center, New York City

WHO: RBC Wealth Management CEO John Taft, Hearsay Social CEO Clara Shih, and Audrey Hendley (General Manager, American Express), in a session moderated by CBS News business analyst Jill Schlesinger.

See you there, or check back on our blog to see live notes and tweets from the event at #inFC14!

For a summary and video of Clara’s panel from last year alongside ex-Merrill Lynch Wealth Management Head Sallie Krawcheck (@SallieKrawcheck) and CNBC’s Herb Greenberg (@herbgreenberg), see here: https://hearsaysocial.com/2013/05/linkedin-financeconnect-2