Making Technology Work

Retirement plan advisers are continually looking for an edge over the competition. Usually, this effort entails a strategy for being better, quicker, or more efficient than those with whom they compete. One area where an increasing number of retirement plan advisers are choosing to differentiate themselves is through the mastery of electronic media.

What is available?

Social media and electronic marketing options for the financial adviser have grown over recent years and there is no indication that the proliferation of options will subside soon. Many electronic tools exist today that enable the financial adviser to leverage both time and money, including: Webinars, blogs, e-mail, search engine optimization, LinkedIn, Facebook, Twitter, Foursquare, Google Buzz, et al.

However, caveat emptor. Availability is only the first screen in determining if a specific technology can translate to functionality for an adviser. It is only after there has been an acceptance (by industry authorities such as FINRA or the SEC) and an approval (by an adviser’s broker/dealer or a compliance officer) that an adviser can consider employing such technology.

In today’s environment, that’s a pocketful of dreams before there is a real savings or benefit being passed to a client via the full functionality of such technology.

Advisers find themselves at a dangerous intersection. The electronic media industry is developing more rapidly than most advisers and compliance professionals can digest. To the left are technology-based productivity tools, to the right is a client base desirous of innovation and automation, while straight ahead are the industry’s regulatory reminders from FINRA and the SEC (and some internal compliance departments) that “everything electronic” is to be considered advertising.

What’s an adviser to do?

The “electronic media” conundrum is one best addressed with a structured process that includes compliance and an electronic media consultant (also known as a marketing specialist or search engine optimizer).

Step 1—Compliance: Before hiring anyone to assist you in an electronic media decision, make certain that you comprehend your firm’s policy relating to the usage of electronic media. This initial conversation should serve to educate the adviser of the firm’s position on acceptance (or avoidance) of electronic media. An added bonus is that there normally will be no out-of-pocket expense with this in-house conversation. Advisers should have a proactive conversation with compliance and ask them: “What are we permitted to do? What can we deliver to clients electronically? What am I permitted to take advantage of?”

Step 2 —Research: This is the time for ideas. Engage an electronic media consultant on an hourly basis to learn exactly what may be possible if an adviser is able to leverage all Web-based tools and resources. (You have the option of conducting this research yourself and learning what other companies do to maximize such tools. However, for most advisers, doing so would be a poor use of time as it is not your core business, you may be learning most of it for the first time, and what you learn may be obsolete in six months—or six weeks!) Under an hourly engagement, anticipate two to six hours to obtain a thorough understanding of the landscape.

Step 3—Compliance: Now that you have a good awareness of what your firm permits, and what is possible, it is time to use your sales and negotiation skills to determine your personal electronic media strategy. Return to compliance to see where there can be common ground for advancing your sales or servicing cause.

Step 4—Implementation: Install your electronic media strategy as agreed upon by you and compliance.

Just as there is no requirement that a plan sponsor work through a financial adviser when faced with the daunting task of selecting a retirement plan service provider (a.k.a. vendor), the plan sponsor’s route to a vendor is usually more circuitous than direct. It is completely normal for a plan sponsor to look to the knowledgeable and trustworthy retirement plan adviser to arrive at the most efficient solution. Financial advisers looking to enhance their electronic media strategy are equally well-served by hiring a competent specialist.

Steff C. Chalk is CEO of the Fiduciary Consulting Group, a fee-only fiduciary consulting practice serving corporations and nonprofits. A judge for the PLANSPONSOR Retirement Plan Adviser of the Year award, and a faculty member of the PLANSPONSOR Institute, he is also the ­co-author of How to Build a Successful 401(k) and Retirement Plan Advisory Business.