David Edwards, founder and president of New York-based Heron Financial Group, has big ambitions for the company. The 53-year-old wants the firm to have $1 billion in assets under management by the time he retires in 12 years.
That would increase the assets Heron administers by more than five-fold, considering Heron had $160 million in AUM at the end of October. Growing that much might seem like a tall order, but Heron has been growing by leaps and bounds since making a strong commitment to marketing through social media when the comapny expanded four years ago, Edwards said.
For 17 years, Edwards had a solo practice as a financial advisor. But in 2010, with his children grown, Edwards decided to expand. That year he added an employee and began exploring the possibilities of marketing through social media. Now there are six people in the company, including Edwards. And the success that social media has brought has exceeded Edwards' expectations.
A key move was hiring Portland, Oregon-based Smarsh 18 months ago to archive all of Heron's communications and marketing, he said. As a registered investment advisor, Heron must keep a record for the SEC of all such communications, including what it posts on its four social media outlets -- Facebook, Twitter, LinkedIn and YouTube.
Smarsh keeps track of all that for a fee of about $1,000 a month, Edwards said, so Heron can use social media aggressively without worrying about keeping a record. Heron has not had an SEC examination, but Edwards is confident it will have everything it needs if and when an examination comes.
Before going hard on social media, Heron was growing at a rate of about 6 percent to 8 percent a year. It managed assets of about $65 million in 2010. The growth rate increased to 40 percent in 2012 and 40 percent in 2013, Edwards said. He believes it will be more than 40 percent this year, and the company will have $180 million assets by the end of December.
The beauty of social media is that each platform complements every other platform, he said. When Edwards makes an appearance in an article or on radio or television, the company posts it on Facebook, Twitter, LinkedIn and YouTube.
"We call social media the force multiplier," Edwards said. Since the company built a presence on social media, Edwards receives between six and 12 requests a month to appear or be quoted in the media.
Most of the company's $100,000 per year marketing budget is spent on sailing and polo events it sponsors that help it reach its target demographic, families with at least $500,000 to invest. Heron has no institutional clients.
"You cannot be all things to all people," Edwards said.
The company now has 95 clients, many of whom have invested a few million, with the two largest clients entrusting abut $11 million each.
Social media has enabled Heron to sign some younger clients, but it still has some that were born before 1945.
Another tier of clients are the so-called baby boomers, those born between 1946 and 1964. Another tier that the company is trying to develop are the so-called Generation Xers, which Edwards considers to be those born between about 1965 and 1985.
Edwards likes to quote something that hockey great Wayne Gretzky used to say, to the effect that he had success by going where the puck would be instead of going where it is. To that end, Edwards will add another company aimed primarily ast Generation Xers next year, to be called Heron Wealth.
Baby boomers care about confidence, Edwards said. Generation Xers care about trust. "They will spend eight hours (on the Internet) researching a toaster," he said.
He expects Generation Xers to Google Heron and his name before signing on, and he wants to make sure everything they see inspires trust.
Heron's asset target for 2015 is $280 million by year-end.
Heron is one of 20,000 companies Smarsh has as clients. Steve Marsh would not disclose the privately held company's revenue, but he acknowledged that it has had substantial growth since he started it with two personal computers in his apartment in Brooklyn in 2001. He said it was one of the first companies to focus on such archival recordkeeping.
Now Smarsh has 225 employees, including about 120 at its headquarters in Portland. Its clients including one-person companies and companies with 10,000 employees, such as the AIG Advisor Group. Smarsh also has offices in Los Angeles, New York and London.