Michael Decauni, founder of Callian Capital Private Wealth Management Inc. in Toronto, observed last year that a number of clients were asking him if he or his firm had a presence on Facebook. These requests got him thinking about joining the world of online social media.

Last December, Decauni created a profile on Twitter, a social networking site through which users post short blogs (known as “tweets”) of 140 characters or less. Decauni started tweeting about financial news he thought would be of interest to his clients. Then, last March, he built a “fan page” for his firm on Facebook, which features news about client appreciation events and other information about his firm.

“It’s important to adapt to client needs,” Decauni says. “They like to have a firm that is accessible and that they can relate to.”

There’s no question that online networking is changing the way businesses build relationships with their clients. Social media sites have attracted hundreds of millions of users in less than a decade. Since Palo Alto, Calif.-based Facebook Inc. launched its site in 2004, the site has grown to accommodate more than 400 million users worldwide. LinkedIn, a professional networking site launched by Mountain View, Calif.-based LinkedIn Corp. in 2003, has more than 65 million users. San Francisco-based Twitter Inc. has 106 million accounts, although one study suggests a large percentage of those are inactive.

What makes these sites “social,” unlike other websites, is their ability to facilitate conversations between users. For example, Facebook acts as a personal social network through which friends and family members — as well as businesses — can exchange both private and public messages. Individual users can invite “friends” — people they have approved to view their profiles — to events, and share personal pictures and videos. Businesses can use Facebook as a way to communicate with clients and other contacts on a less personal level.

LinkedIn is a social networking site similar to Facebook, but with an exclusively business-oriented approach. Users list their professional titles and the organizations they work with, post resumés and connect with colleagues or others they may know — or wish to know — through their work. Many LinkedIn users and employers use LinkedIn as a job-hunting and recruiting tool; it has a section for job postings.

Andray Domise, a financial advisor with Toronto-based International Capital Management, saw social networking as a way to build his brand. Clients and prospects routinely research professional contacts on the Internet, according to Domise: “The first thing people do when they are referred to someone new is Google them.”

Domise, by linking his website (www.andraydomise.com) to LinkedIn, Facebook and Twitter, increased the likelihood that people would find information about him, his financial planning approach and his background. Says Domise: “Social networking sites help referral [prospects] better understand who I am.”

A prospect who has been referred to Domise by a fellow LinkedIn member may have seen Domise’s name in the “friends” list of that member’s LinkedIn page. That makes the prospect slightly familiar with Domise when Domise calls him or her.

“It makes for much warmer conversation when contacting prospects,” Domise says.

As more advisors join the social networking wave, the question won’t be whether you should embrace social media, but how.



> Compliance

The first issue to consider when embarking on any new communication strategy is compliance. Consult your firm’s compliance department to make sure your firm allows the use of social media sites. Also, find out if your firm has a policy on their use and if the material you plan to post is appropriate.

“You want to make sure the dealer permits social media, because some of them don’t,” says Ellen Bessner, a partner with law firm Cassels Brock & Blackwell LLP in Toronto and author of Advisor at Risk: A Roadmap to Protecting Your Business.

Communicating by online social media falls under the rules that govern client communications, according to Bessner. “Always remember that once anything goes into the Internet — Twitter, Facebook or even email — it’s public information,” she says. “It’s going beyond the people you intended the materials for, and it’s going to the regulators. You always have to ask yourself: ‘Have I complied with all of my obligations? Is there anything here that can come back to haunt me?’”

@page_break@Previously, Domise had worked with a larger dealer, which prohibited the use of social media. It was only when he switched to an independent firm in 2008 that Domise was able to start building his presence online in this way. “Some of the larger companies,” he says, “have a difficult time letting advisors roam free online.” One exception to that observation is Toronto-based Sun Life Financial Inc., which has taken a leadership role in exploring the benefits of social media. Sun Life recently ran a pilot project in which advisors used social media sites in their efforts to maintain and extend their client networks. The advisors found they were able to contact clients and prospects using social media without violating any regulations. “There’s no transacting online,” says Bill McCollam, Sun Life’s vice president of digital strategy. “[Our posts are] just to give people a better view of what’s on an advisor’s mind.” Regulations allow advisors and firms to present general messages online. You may not offer specific financial advice. Domise’s posts, for example, consist mainly of general tips and information about his firm, such as client events. “I make posts to help people become aware of my role as a financial planner,” Domise says.

> Have A Plan Another important issue to consider is expectations. Your presence on Facebook, LinkedIn or any other social media site is not going to generate a flood of quality prospects overnight. Neither will it generate measurable profits in the short term. Social networking sites can, however, help you build stronger client relationships over time. But you must choose carefully the information you want to convey, and devote time and attention to the project. “You want to plan ahead; don’t just go in all willy-nilly,” says Ivan Misner, author of Networking Like A Pro and founder of Upland, Calif.-based Business Networking International, a referral organization. Developing an achievable online social media plan starts with determining which clients you want to reach, says Livia Grujich, co-founder and managing director of Toronto-based OnQ Communications Inc. , a consulting firm that specializes in online social media. “Do a survey,” she says, “and ask people: ‘Are you on Facebook? Are you on Twitter?’” The results of your survey may surprise you. While LinkedIn is often thought to be a more favourable place for advisors to network online due to its professional image, advisors who participated in Sun Life’s pilot project came to a different conclusion. “What [advisors] learned from the pilot was that Facebook was by far more effective [than LinkedIn], in getting them connected with their friends,” McCollam says. “It allowed them to relate to people and their networks in a much more effective way.” Misner had a similar experience when he first entered the world of social media. He signed up for LinkedIn and an online address book and a social networking site called Plaxo. But he avoided Facebook: “I thought it was a bunch of kids or people looking for dates.” Misner consulted a social media expert, who demonstrated to Misner that his target market — business people looking for referrals — consists largely of Facebook users. “I didn’t think my members were on Facebook,” Misner says. “But now — between my company page, my personal page and fan page — I have 12,000 people following me on Facebook.”

> Choosing Content Once you have determined the type of audience you want to reach, the next step is to determine the content you will post. Regard your posts, blogs or tweets as your “golden nuggets” of information, says Grujich: “Think of your content as an original piece of information that clients can get excited about. And you don’t want it to be promotional.” If a post is perceived as promotional — with an overt commercial message — the social media community won’t buy it, according to Grujich. “The Facebook page shouldn’t be there to say, ‘This is why we are great.’ That’s just advertising,” she says. “It should say: ‘This is what we can offer you and the problem we can solve’.” If the information is useful, it will “go viral” and travel quickly throughout the social media community. People want to see what you are capable of, Domise says. This means you could provide them with general advice on financial product categories or the benefits of a tax-free savings account. Posting information about educational seminars and client appreciation events may also be of interest to clients. Keep your posts clear and jargon-free, using the kind of language you would use in a normal conversation, Grujich advises: “Try to keep it simple, or you might lose people.” After you have decided which online social media sites you will use, as well as your target audience and your content, you should draw up a few simple goals. For example, Grujich says, you might aim for 50 members of a specific demographic group — as friends, contacts or followers — over the next six months. Grujich recommends a six-month trial period to give your strategy enough time to gain momentum.

> Keep A Steady Flow Of Information Your social media strategy won’t succeed if it consists of sporadic, one-time posts. Instead, it should be an ongoing project with a scheduled flow of information that builds enduring connections with clients, prospects and colleagues. That requires time and commitment. It takes time to gather and organize content for these sites — whether that content is a quick “tweet” featuring a link to a video clip of interest to clients or a reminder to clients about saving their receipts for tax time. The key is consistency, Grujich says. You must post regularly. “You have to seed it along in the beginning,” she adds. “That means having someone there engaging people on an ongoing basis.” The most common complaint among advisors and other business people in the early stages of a social media strategy is that it is time-consuming, according to Misner: “By the time I’ve updated my latest blog, accepted my friend requests and clicked on a few tweeted links, almost two hours have gone by. You need to budget your time.” This means making a formal schedule for social media activities. For example, on Mondays, Wednesdays and Fridays, you could devote an hour to deal with all your social media upkeep. On Mondays, the hour could go to making new contacts and accepting friend requests; Wednesdays would be for updating your blog; Fridays could be for responding to questions. Getting a staff member or an assistant to do the basic tasks of accepting contacts to your pages is another way to organize your time. “I usually get a staff member to do the ‘friend accepts’ and status updates for me,” says Misner, who then spends his time focusing on writing his blog and answering messages that people have sent. You can also save yourself time by using social media tools that cut down on the time spent updating. Some widgets (small applications that work as tools), such as Ping (www.ping.fm), allow you to update Twitter, LinkedIn and Facebook all at once. CoTweet (www.cotweet.com) offers a number of tools for businesses that use Twitter, including scheduling your tweets for clients in different time zones.

> Anticipate The Risk Imagine you have been updating your blogs and tweets for a few months and then it hits you: a post from an angry client criticizing your advice and your firm. When you engage in social media, remember that it is a two-way form of communication. You may be able to control the content of your own posts and tweets, but you can’t control what your friends, contacts and followers say about you. Not to worry, says Grujich. Drafting a social media crisis plan can equip you to deal with unexpected situations in a professional manner. The way in which a business handles a critical post, Grujich says, will say more about its credibility than what the post insinuates on its own: “As they say in public relations, it’s never ‘No comment.’ The audience wants to see how you respond.” Sun Life considered the possibility of negative messaging before allowing its advisors to build profiles. Says McCollam: “[Among] the issues we contemplated as we [entered the world of social media] were: ‘What are the bad things that could happen? What if we get very inappropriate or negative commentary? How would we respond?’ One of the nice surprises is we didn’t really have any issues like that.” Neither Domise nor Decauni has experienced any negativity, either. However, it never hurts to have policies regarding backlash outlined beforehand, Grujich says. The details of your response to a negative message will depend on the nature of the comment and the site on which it is posted. Whatever the situation and your reaction, be sure spectators see your response. Keep your response objective and factual, and avoid the appearance of “attacking” your critic or a competitor mentioned in the criticism. Invite clients to discuss with you any further concerns they may have over the issue. > Measure Your Results The performance of your social media strategy is not measurable in dollars, but there are ways to determine its success. “A social media strategy is about visibility and credibility,” says Misner. Thus, your goals and the tools you use to measure success should reflect those qualities. Rather than comparing how many tweets have translated into landing a new client or a new prospect, Grujich suggests, measure your success by how many new people were engaged in the conversation, how many times people re-tweeted or repeated your content, or how many fans have joined since you started the page. Tools are available, such as Google Alerts and Techorati (www.techorati.com), that can help you measure the viral life of your post after it leaves your site, according to Grujich: “With every strategy, it’s important to see if it is living up to its expectations.” If you find your social media activity is exploding, you may consider hiring a part-time assistant to handle the increased activity. But if your social media plan hasn’t taken off the way it should, re-examine your original goals. Whatever you do, don’t quit, says Grujich: “Even if you aren’t doing something in this space, people may be actively discussing you anyway.” IE