Cold Calling for Our Time: Merrill Likes LinkedIn
(Updates with number of Merrill advisors on LinkedIn in 11th paragraph.)
Call it one small step for programmers, one leap into the social media prospecting vortex for Merrill Lynch and its 14,000 brokers.
Merrill last Thursday embedded a LinkedIn tool onto its “Find a financial advisor” webpage alongside more traditional search methods such as typing in a zip code or searching for a broker by name. It allows potential clients who agree to share their LinkedIn profiles and connections with Merrill to have the firm suggest matches that go beyond geography.
Heavily regulated wealth management firms have struggled to use digital marketing techniques exploited by nonfinancial competitors out of fear of violating prohibitions on advertising hype. While Morgan Stanley and other firms have permitted brokers to maintain carefully cultivated LinkedIn profiles, Merrill’s move is the first by a large firm to use the social network as an automated reverse-referral source.
“Merrill Lynch is on the right track,” said Justin Wisz, chief executive officer of Vestorly, which ensures messages are compliant for brokers and other wealth managers to use over social media.
Wisz cautioned, however, that brokers and their firms have to be ready to seduce prospects with interesting and differentiated content once a first connection is made or risk losing them. The four-year-old firm learned that lesson the hard way.
“We had this idea where we could generate referrals for financial advisors if we could find mutual contacts,” said Wisz. “It didn’t work.”
As with all match-making sites, a LinkedIn referral can backfire if a prospect deems a mutual connection suspect. “If you have a mutual connection who is a party animal, it may make you want to stay away from the advisor,” Wisz said.
The flip side, of course, is that a well-managed LinkedIn presence can instill confidence in clients and prospects alike.
“The more they can find out about the financial professional through their professional profiles, the more likely they are going to move towards working with them,” said Meagan Hency, vice president of marketing at Hearsay, a social media consulting firm for wealth management firms. “Advisors who are using [social media] are sharing content and activities across their networks.”
For Merrill and other firms, the challenge is to encourage advisors to set up profiles and keep them current while ensuring that they vet all content first with compliance.
About 6,520 Merrill brokers who identify themselves as “advisors” have LinkedIn profiles, according to a search of the social network. Merrill would not comment on what it may be doing to increase that number but a spokeswoman said it is encouraging those who do have profiles to “make meaningful connections” so that the enhanced FA Finder page can do its work.
The tool is far more direct than the conventional methods used by Merrill rivals. Most webpages devoted to finding an advisor offer broad searches by branch, broker name or location followed by a link to a phone number or questionnaire.
Regulatory strictures on brokers’ online outreach remain tight, but many are still eager to build their digital presence. According to a 2016 Putnam Investment survey of 1,000 financial advisors, 80% found new clients through social media and gathered $1.9 million in new assets. More than half use LinkedIn while almost 25% conducted business through the more personal portals of Facebook.
Some advisors have stumbled in mixing business with social outreach. JPMorgan Securities sued an Oklahoma broker who left the firm last fall for allegedly violating a nonsolicitation agreement by posting a message about her new job on her Facebook page.
Social media has been a landmine for firms as well, with particular concerns about violating client privacy laws. In sending prospective clients away from its site to LinkedIn, Merrill has steered a narrow course, according to the social networking site.
“If a member connects to the Merrill Lynch search feature…the member gives LinkedIn permission to share with Merrill Lynch that member’s connections,” Suzi Owens, the network’s senior manager of marketing and communications, said in an email.
Merrill also has no control over people who wall off display of their connections by using LinkedIn’s privacy settings. Indeed, since access is controlled through LinkedIn, Merrill also cannot isolate former employees whose profiles still list a Merrill affiliation from showing up as suggested connections.
Users of Merrill’s new finder tool, by the same token, will have their own profiles shared via the advisor search connection until they actively opt out of the permissioning function with LinkedIn. That, too, can open Merrill to potential problems.
“Being clear about what data they are collecting and how they are using is really important,” said Hearsay’s Hency. “It’s a step in the process [and] it’s yet to be proven how comfortable consumers are in using their logins to connect.”