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Wells Fargo now gets a third of its fee revenue from its relatively small investment-management and brokerage businesses. Executive David Carroll explains how Wells is getting more business from its wealthy — but not too wealthy — customers and is seeking acquisitions in this market.
April 23 -
WASHINGTON — Rep. Maxine Waters, D-Calif., the top Democrat on the House Financial Services Committee, introduced legislation Friday to give the Securities and Exchange Commission the authority to impose and collect user fees from investment advisors.
April 19 -
Financial advisors are using too many different senior certifications to lure older consumers into business, according to a report by the Consumer Financial Protection Bureau.
April 18 -
The JOBS Act will allow broader marketing of private placements. Take great care when selling these to your bank's financial advisory and wealth management clients. Focus on what suits them.
April 5
Would you "friend" your financial advisor on Facebook? Evidence suggests wealthy people are incorporating social media in their financial decisions. Nearly 70% of wealthy investors have reallocated investments, or began or altered relationships with investment providers based on content found through social media, according to a survey conducted by Cogent Research of 4,000 investors with more than $100,000 in investable assets. Financial advisors are becoming more active on Twitter, Facebook, and LinkedIn as well: 48% interact daily with clients through social media, according to an Accenture survey of 400 U.S. financial advisors.
"I think we'll see more and more advisors using social media — just like their clients," says Theresa Hamacher, president of the National Investment Company Service Association. "It's a rapidly growing community."
The missing link here for banks, at least according to the founders of a startup launching today called Finect, is a means of letting financial advisors communicate with clients and prospects over social media without running afoul of regulatory requirements such as Finra and SEC rules.
"The bank that thinks, 'I can sit on the sidelines' [of social media] risks losing clients," says Jennifer Openshaw, who in addition to being president of Finect is a columnist for the Wall Street Journal's MarketWatch and was the original founder of the Women's Financial Network (which is now owned by Muriel Siebert). "Clients are choosing their professional advisors via social media, or they want to connect with or be serviced by them with social media."
A bank that signs up for Finect — and BBVA in Spain has already begun piloting this — sets up co-branded communities on the platform. A bank might set up a group for financial advisors that they can use to update clients, provide research and show composite portfolios. The bank could form communities around topics, such as dividend investing or Social Security in the new century, Openshaw says. It could create a group around a portfolio manager or an investment strategy. The monthly subscription price ranges from $39 to a few hundred dollars.
Finect, which has a look and feel akin to LinkedIn, gives the bank or other host organization the tools to monitor the LinkedIn and Twitter posts of all employees that use it (Facebook integration will be added later). Compliance officers can watch all ongoing activity and remove any content that violates a rule. The roles and permissions settings on the site let the bank set controls on social media activity - for instance, it could require all new messages by certain members to be reviewed and approved or rejected by a compliance officer before going live. (The site does not provide the more sophisticated red-flagging features of other social media compliance software products that, for instance, will find and quarantine any post with an off-limits word such as "guarantee" in it.)
"Finect allows investment professionals to manage all of their business social media in one place — blog, Twitter, LinkedIn," says Hamacher. "You'd think that would be easy — but social media is so new, Finect is the first service I've seen providing this integration."
The site can also serve as a way to distribute content such as research reports. Reports and notes can be posted to Finect and sent out to LinkedIn and Twitter from there, and archived for compliance purposes.
Chilton Capital Management, a registered investment advisor based in Houston, has been beta-testing the site for this purpose. "Finect has a powerful graphics and content customization tool that allows you to maintain your branding within their system to an audience of financial professionals and investors," says Samuel Rines, an analyst and economist who writes a monthly economic report called Chilton Currents. "Compliance is always a concern, and Chilton processes all outgoing publications with the proper disclosures. But social media in the past has been difficult to track. Finect tracks all Twitter and LinkedIn communications by employees from their system. We see the benefit of Finect in its pool of knowledgeable investors and industry professionals to whom we can market and engage directly in a manner we have not been able to previously."
Next steps for Finect, apart from adding support for Facebook, include building a central repository of research advisors can access that would include materials such as research, PowerPoint presentations and videos that could be searchable by asset class and firm name.
