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Hearsay Innovation Summit 2016: What's Next for Financial Services?

 

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It’s all hands on deck at Hearsay Social as we prepare for our fourth annual Innovation Summit (#hearsaysummit), which takes place this Thursday, May 5, in our hometown of Silicon Valley. We’re honored to host nearly 100 executive leaders and startup thinkers from the financial services industry and beyond for a day of thought-provoking discussion about the future of financial services products, distribution and the new customer experience.

Key themes include what the ongoing role of human advisors and agents should be in an era of direct-to-consumer options and changing consumer expectations, and the implications of the recent Department of Labor ruling regarding fiduciary duty. Attendees represent various sectors and functions of the industry, including wealth management, mortgage, insurance and banking, as well as general management, marketing, technology, compliance and distribution.
In a series of TED-style talks, fireside chats and – new this year – a spirited presidential-style debate, guests will learn the latest industry perspectives, best practices, challenges and growth opportunities from leaders and disruptors in both financial services and technology.
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Shelley O’Connor, co-head of Morgan Stanley Wealth Management (@morganstanley), will deliver the opening keynote address. Clara Shih (@clarashih), CEO and founder of Hearsay Social, will present her perspectives on today’s omnichannel, always-connected customer journey and what firms and advisors must do to own the digital last mile.
Attendees also will hear from Kenneth Lin (@kennethlin), CEO and founder of Credit Karma, and Amit Jhawar, COO of Braintree (@braintree), as they discuss how they’re revolutionizing the way people obtain credit scores and companies process payments. Charles “Chip” Roame (@chiproame), managing partner at Tiburon Strategic Advisors, will present the firm’s latest wealth management research.
Also on the agenda is a friendly “robo-advisor versus traditional brokerage showdown” featuring the CEOs of two robo-advice startups – Michael Sha of SigFig (@sigfiginsights) and Bo Lu (@bolu) of FutureAdvisor (acquired by BlackRock) – and Naureen Hassan, chief digital officer of Morgan Stanley Wealth Management.
To provide a broader view of technology at large and the forces shaping Silicon Valley, Debbie Sterling (@debbieblox), CEO and founder of Goldieblox, will share her startup story and viewpoints on where the tech industry is heading. Special guest Jon Sakoda (@jonsakoda), general partner of venture capital firm New Enterprise Associates, also will discuss his expert insights on the current and future state of tech.
Check out #HSonAir’s special podcast for more on what to expect:

Also, be sure to follow us on Twitter at @hearsaysocial and #hearsaysummit this Thursday, May 5, for live Summit coverage, and check back for key learnings and takeaways from the event!
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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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Hearsay Social Wins the Wealth Management Industry Award for Best Social Media Platform

WealthManagement.com Industry AwardsWe’re honored to announce that Hearsay Social was named the best social media platform by WealthManagement.com and REP. magazine, as part of the first annual WealthManagement.com Industry Awards program (#WMAwards). The winners were announced last night at a black-tie dinner event at the Mandarin Oriental in New York City.
The awards program acknowledges excellence among vendors and suppliers serving the financial advisor community and recognizes forerunners of innovation and leadership in support of advisor success. Finalists and winners across 37 categories demonstrate industry expertise, superior products, top-notch service and innovative technology.
“The new platform from Hearsay Social lets advisors identify cross-channel client activity across multiple online and digital channels, including social media and websites,” said the awards committee. “Through machine-learning algorithms and predictive technology, the platform recommends the right content (from its built-in Predictive Content Library), and encourages the advisor to share it with the right person at the right time.”
See the full slideshow of winners.
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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:
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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.

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Highlights From the In|Vest Wealth Management Conference 2015

Guest contributor Xin Wang, Solutions Consultant at Hearsay Social, recaps the 2015 In|Vest Conference from June 18-19. 
Hearsay Social recently attended the In|Vest Conference in New York. The 2-day conference brought together an array of individuals, from executives at the largest financial institutions to founders of financial technology startups that are disrupting wealth management, to provoke conversations around the future of the industry. From idea hackathons to keynote speakers to product demos to panels, here invest conf 2015 photo are a few highlights of what we heard.
 
Technology to make financial services more efficient, or a disruptor?
On one hand, the sheer presence and name recognition of robo-advisor startups such as Betterment, FutureAdvisor, and Motif Investing represent ongoing fintech innovation. The common thread across these disruptors lay in their mission to use their platforms to build a relationship with customers based on transparency, low prices, and a great customer experience. Robo-advisors are seeing traction today, with Betterment announcing they are nearing the 100,000 funded account milestone, consulting firm A.T. Kearney forecasting robo-advisors to become a trillion dollar market by 2020, and several incumbents – Vanguard and Charles Schwab – recently announcing that they are entering this robo-advisory space.
On the other hand, even as some financial services products are being commoditized, both large and small financial services players recognize that there is still a need – whether it’s high net worth or complex assets or fringe cases – to provide personalized service through human interaction. So while technology charges forward to simplify the account opening process or to analyze predictive behavior, relationships and advice are here to stay. And that is manifested in large financial institutions who are putting resources into technology that frees up their advisors to do higher value work and all three of the aforementioned robo-advisor startups seeing the need to launch both director-to-consumer offerings, as well as solutions for advisors.
Millennials: A top-of-mind segment for all firms  
Millennials represent an out-sized share of wallet to many financial services companies because of the expected large intergenerational wealth transfer that will happen in the next few decades, as well as the surge in young and wealthy entrepreneurs. They present a new profile of consumers for the incumbents and provide challenges for all due to their high expectations of digital financial capabilities, their desire to consume content and interact in real-time, across social media, mobile, web, text, and their demanding nature of always wanting more. And yet they exhibit behaviors that are similar to other cohorts, such as valuing that one on one relationship and paying a premium for advice. Many of us are excited to see how they will fuel financial services innovation today and in the coming years.
To learn additional insights on how financial technology firms are disrupting the financial services industry, and what advisors can do to stay ahead, read insights from Hearsay Social’s 2015 Social Business Innovation Summit, and listen to a keynote from our founder.
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3 strategies to overcome social media challenges in wealth management

Article first appeared on thewealthnet on Tue, Dec 9, 2014.

logoThe wealth management industry has been slow to embrace and understand how to harness the power of social networks in their organizations. However, with a billion people on Facebook and 200 million on Twitter and LinkedIn each, there’s no question that your customers – both young and old – are already there. Clients today expect their advisors to interact more often, to offer them more personalized service and to communicate when and where they want.
A recent 2014 survey by PAM Insight of financial advisors shows that, compared to last year where only 67.9% used Linkedin, this year that number has increased to 83%. The other network that was mentioned was Twitter with 54% having corporate Twitter accounts. The future also seems bright for social media initiatives with over 72% planning to increase spend in the next year.
Hearsay Social recently had the opportunity to dig behind these numbers when it partnered with Financial Services Forum to host a meeting with heads of marketing from some of the largest wealth management firms in UK. A roundtable discussion on the state of social media and the challenges facing this industry brought to light three key challenges and strategies to overcome perceived barriers:

Risk

When it comes to the biggest barriers in adopting social, compliance and risk took center stage. PAM Insight reports that “as with previous year’s survey, 66.7% of advisors stated compliance as the main concern.” But the problem here was less about specific requirements and more about the fact that there is no clarity on what the rules are, which has paralyzed many companies into taking no action.
Recent guidelines from FCA were applauded by the group to be a move in the right direction but there were still a lot of questions on what FCA will and will not accept. There was agreement that the industry can’t wait indefinitely for the rules to be clear, so companies should start by implementing some basic social media strategies:

  • Provide advisors with a pre-approved library of content
  • Enable a workflow to automate content approval
  • Adopt a third-party system to capture social conversations and archive it.

Content

Another area that sparked a lot of conversation amongst the group was content. How do you differentiate your content from your competitors? How do you ensure that your content is not “spam” for your customers? And, more importantly, how do you shape the conversation on social media?
This concern was consistent with PAM Insight’s finding that showed 64.3% of respondents were concerned about lack of control on what content is communicated. After much discussion on this topic, attendees agreed that the best strategy to overcome content issues is education. Education on how to represent yourself online in a manner that is true, trustworthy and personal. Education on the right type of content for the right audience. And education on regulatory risk and social media policies of the company.

Timeliness

Most participants feel that social media moves too fast. If you want to be on social media channels, you need to be prepared to respond in time. Many people spoke about the compliance process and the length of time it takes, often making social conversations less relevant by the time they are ready.
Since introducing any change takes time, it is imperative that companies start now to understand what social media can do for them and take incremental steps to help their people build relationships online. Creating cross-functional teams with marketing, sales and compliance and educating themselves on how social media works are a couple strategies that can help with timeliness and embracing these new channels of communication.
Overall the impact and benefits of social media dominated the conversation. This is again in line with the survey results of PAM Insight. The survey showed that 61% of advisors believed “building industry presence and credibility” was the biggest benefit. While 44% said attracting clients and retention of existing clients (80%) were important benefits of social media.
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Interview with Megan Leonhardt of WealthManagement.com and REP Magazine: #HSonAir Episode 14

Megan LeonhardtIn episode 14 of Hearsay Social On the Air we we take the show on the road to New York City and visit Megan Leonhardt (Senior Editor of WealthManagement.com and REP Magazine@megan_leonhardt).
In the interview, we explore Megan’s perspective on the financial services industry in general and her thoughts on social media adoption and growth. Join the conversation on Twitter with @VictorGaxiola and @ronnykerr using hashtag #HSonAir.
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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.
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Research: Financial advisors improve client retention and increase AUM with digital and social tools

Digital Wealth Management researchAt Hearsay Social, one of the most frequent questions we hear from the financial services industry is this: “What is the ROI of social media?”
Depending on who you ask, there are a few answers. What we’ve seen is that social media ROI is largely qualitative, with a social media presence alone resulting in new business or better relationships with existing clients. Additionally, the ROI for each firm will depend on the goals associated with that firm’s particular social strategy. For many firms, the first measure was growth, connectivity, and having a compliant social presence with little to no infractions.
Beyond that, however, we’ve heard countless anecdotes directly from financial advisors attributing increased business to their use of social media. Backing up these anecdotes, Accenture recently published a report entitled Reimagining Wealth Management for the Digital Age, which explores not only how digital technologies and social media are changing the wealth management industry, but also what results have been seen.
Here are a few of the best results:

  • Over half of financial advisors have found and/or converted clients via digital channels
  • 77% of financial advisors have improved client retention via digital/social tools
  • 74% of financial advisors have increased assets under management (AUM) via digital/social tools

Besides these and other eye-opening statistics, Accenture’s 20-page report analyzes how digital technologies and the new “digital generation” have disrupted traditional ways of doing business in the wealth management industry. Near the report’s conclusion, the consulting firm offers three essential components that will help financial firms, advisors, and their clients find success in the new digital era:

  1. Empowerment: of both client and advisor, building trust by making clients better informed
  2. Engagement: to enable a more collaborative relationship between client and advisor
  3. Agility: of both mindset and business model, to adjust rapidly to the speed of change

To learn more, download the full Accenture report here.
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Your customers are evolving – change your ways! A message to private banking and wealth management

IMG_8119Hearsay Social was recently invited by The Financial Services Forum to attend an event where Mr. Robert Taylor of UK Financial Conduct Authority (FCA) was addressing the private banking/wealth management industry. Robert Taylor is the Head of Wealth Management and Private Banking Supervision at The Financial Conduct Authority.
The early part of Taylor’s talk focused on how the private banking world has not evolved to where the customers are and where they are going. He spoke about how most companies are still focused on finding and retaining the star relationship manager who the company believes will bring the clients. He cautioned that this model was not generating new clients or new revenue but instead is churning old ones.
To hear other key takeaways from the session, read the full post here.
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