Often times asset managers do not have a clue on what to do with social media. Part of the issue is a lack of understanding of how they differentiate themselves beyond performance returns. The next level of marketing sophistication is to know the other differentiating factors, but unfortunately the public does not often understand these points because they are usually based on industry jargon.

When firms are ready to convey an effective message that the public will understand, then it is time to figure out how to reach investors. Of all the marketing techniques, social media is becoming a dominant tool for both mass communications and more intimate interactions.

What To Communicate
Asset managers should do research with their existing clients and see what they want communicated to them and how they want it communicated. They should look at competitor tactics and also be innovative, as new and creative communications likely do not yet exist. The financial services industry is so conservative it is lagging most other industries. For that reason, looking outside of financial services is a great opportunity for organizations to see what are possible best practices.

State Of The Industry
Jesse Mark, Research Analyst at kasina, said, "Most asset managers are using social media in some capacity. That is a change. Compliance used to be the biggest roadblock. There are definitely challenges, but it isn't just compliance. The biggest challenge is not getting the budget and resources. Lots of firms don't have the funding." He says only 36% of firms have a budget for social media.

What might be more telling is that kasina found that only 48% of firms permit employees to participate in social media sites at work. No wonder the industry is so far behind.

Mark says asset managers who are more successful are the ones that push out more than press-release-type information. Those that engage in two-way communications, like answering questions online, are rare in the industry.

Don't Just Focus On The Public
The folks at kasina also see a large need for asset managers' social media strategies to include intermediaries. Mark stated, "A majority of fund complexes go through financial advisors, and three quarters of them are using social media, based on our own research." For that reason, they are shaping their grading to more highly factor in communications to advisors in their upcoming social media rankings.

A Solid Case Study
In kasina's last ranking, Fidelity performed very well and it would not be a surprise if that is the case in this year's upcoming results.

The inspiration for this article was Fidelity's "Water" video on their new "Thinking Big" microsite. Take less than three minutes to watch it for an excellent example of how asset management firms can use creative content to be successful with social media.

This is exactly the type of content that can go viral and get shared with thousands of people. A quick look at the FidelityInvestments YouTube Channel shows that the video has been seen over 20,000 times. Along with e-mails and other traditional marketing, Fidelity also did a nice job of sharing the video with social media tools like their Twitter page (seen here) that is approaching 50,000 followers.

Lynne Goldman, executive vice president at Fidelity Financial Advisor Solutions (FFAS), explained the video campaign is designed to help demonstrate Fidelity's thought leadership around a global issue, but also helps by providing advisors with useful content they can share with their clients.

Goldman noted Fidelity is also focusing on financial advisors' content, but that site is limited to licensed financial professionals working with Fidelity.

While an industry leader like Fidelity is getting some things right, it has room for improvement, too. For example, it still only has a handful of videos on its YouTube page and it does not yet let its associates act as brand ambassadors, empowered to spread its messages via social media.

Before Diving Into Social Media
For firms to be more successful in the future, they need to open their eyes to the trends in front of them and adapt. The firms that continue to send out the same type of communications through traditional means will find themselves falling behind those that take advantage of a whole new world of communication possibilities.

In kasina's research, they found that only three quarters of asset managers have a social media strategy. Today, it is crazy that the number is not 100%.

In determining a strategy, firms need to ask:
    What do clients and prospective clients want for communications via social networks?
    Where do they want it?
    When do they want it?
    Why do they want it?
    Who should get it? (Some messages should be broadcast to all, while some things should be segmented for specific target markets.)

By answering these questions, organizations will have the foundation to come up with a solid social media communications strategy. In doing so, they should be able to come up with something as simple as a story about water to get added exposure and increased business.

Note: As always, check with your compliance department for its specific guidelines on what your organization will allow you to do with social networks.

Mike Byrnes founded Byrnes Consulting to provide consulting services to help advisors become even more successful. His expertise is in business planning, marketing strategy, business development, client service and management effectiveness, along with several other areas. Read more at www.byrnesconsulting.com.