In “Harnessing Social Media to Drive Business Results, 2011,” kasina found that although 80% of asset managers have management interest, only 68% have developed a strategy, 46% have management commitment, and 34% have a social media budget.

kasina found seven areas in which ignoring social media can be detrimental to an asset management firm. By ignoring social media, firms risk making the following mistakes:

• Avoiding customers, rather than connecting to them where they already spend time.
• Ignoring customers and competitors, rather than listening to them.
• Limiting service opportunities, rather than expanding.
• Without social media, a firm’s message is conveyed as a monologue, rather than interaction.
• Limiting referral opportunities, rather than leveraging vibrant adviser and investor online communities.
• Compromising damage control, rather than managing crises efficiently.
• Reducing brand penetration, rather than growing an online presence.

Management at asset management firms need to realize they are no longer in complete control of their brand, according to kasina. Social media allows advisers and investors to talk about their experiences publicly; unless the asset management firm is present on the site, they will miss the conversation. As kasina said in its report, “Firms need to make a case for return on investment – if not in hard dollars, then in lost opportunities and risks to the brand if they do NOT engage.”

Get the ball rolling 

Eric Daugherty, Principal, CFO, Director of Research at kasina, told PLANADVISER that someone needs to be held accountable for implementing a strategy. Too often, social media has become “five percent of six peoples’ jobs. That’s not the way it should be done,” he said.

Not that one person can (or should) have all the responsibility, Daugherty said. A steering committee can be formed, but it’s critical that there’s a leader and roles are clearly defined, he added. Typically, organizing a social media committee should fall to an internal communications department. It’s less important who’s doing it, as long as someone is, he said.

As for compliance issues, the number of firms citing it as a reason to avoid social media is gradually decreasing, Daugherty pointed out. Last year, 73% of asset management firms said compliance issues were getting in their way of social media, but that number is already down to 63%, he said. “Progressive firms are figuring it out,” he said, and it’s not too late to join them (see “Making Social Media Work”).

kasina surveyed 41 asset management and insurance firms for the study.