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Financial Services and Social Media: How to do it right
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Financial Services and Social Media: How to do it right


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Can Social Media help IFAs battle new competitors and the effects of the upcoming Retail Distribution Review? …

Can Social Media help IFAs battle new competitors and the effects of the upcoming Retail Distribution Review?

In January 2013, the Retail Distribution Review (RDR) will take effect, banning independent financial advisers (IFAs) from receiving commissions from financial services companies, opening up a radical change to the industry. For the first time, IFAs will need to collect fees directly from their clients.

The rules could not come at a more competitive time in the industry.

It is likely that IFA’s will prefer to deal with wealthier clients to achieve higher consultancy fees, leaving the general public with and increasing knowledge gap and no obvious place to turn for independent financial advice.

So what can financial services companies do to engage directly with their customers? Social Media can help, and here's how.

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  • 1. It is time for the financial services market to take social media seriously
  • 2. Exhibit One# Changing legislation
  • 3. The Retail Distribution Review (Jan 2013) will forbid IFAs receiving commission from financial services companies
  • 4. IFAs will need to demand fees when the commission dries up
  • 5. Less than 15% of households currently seek professional financial advice, so charging won’t help
  • 6. Consumers are turning to friends and family for free financial advice
  • 7. Judgement One# A large advice gap is forming
  • 8. Exhibit Two# The social consumer is maturing
  • 9. 68%of the Facebook audience are between 18-44, compared to 45% of the general population
    UK Population
    Facebook Population
    Source UK: Office National Statistics
    Source Facebook : Social Bakers
  • 10. And social users are actively using the social conversation to influence their purchase choices
    Has social influenced your buying decision?
  • 11. And which buying decisions are most influenced?
    Bought financial services as a result of a recommendation via social networking friends
    Bought clothingas a result of a recommendation via social networking friends
    Bought flights/car hire/ hotels as a result of a recommendation via social networking friends
    Source: “Social media used to choose financial services” March 2010
  • 12. Judgement 2# Social audiences should be ready to receive credible advice
  • 13. Exhibit Three# The current players are not ready
  • 14. Social is where PR, marketing, product and customer service all collide, in public
  • 15. Don’t treat
    social media
    like a marketing channel
    but a businesscommitment to conversation with customers
  • 16. Real or not?This un-moderated activity is damaging the NatWest brand
  • 17. Lloyds TSB broadcast some advice well on YouTube but offer a game on Facebook rather than conversation
  • 18. Morgan Stanley invested hugely in an integrated online and social platform
    But forgot their customers were time poor and really wanted a mobile application
  • 19. SUCCESS
    IS A
  • 20. You need buy-in right from the top to bring together the experts from across the business
  • 21. first direct use social transparency to prove their business model works
  • 22. Judgement three#Significant business change is required to take advantage
  • 23. Exhibit Four# The innovators are circling
  • 24. Wonga used social to assess lending risk.They measured desire and ability to repay. Then made it transparent and fast...
  • 25. ....and achieved a 5% default rate compared to the 25% market average
  • 26. is a very simple offering, yet to be tested measuring long term risk.But...
  • 27. “Think, where else do speed, convenience and transparency interest the consumer banking customer? So our vision is bigger than short-term loans.“ Errol Damelin, founder
  • 28. Aggregators are using branding to forge
    strong customer relationships
    3.2m Video Views
    50k Twitter Followers
    785k Facebook Likes
    Price comparison sites earn over £650m a year in commission
    Source: YouGov 2011
  • 29. Judgement Four# It is time for the traditional providers to reclaim their market
  • 30. ISM in judgement
    • New legislation is the business case for change
    • 31. Social consumers have the appetite
    • 32. Significant business change will provide a return
    • 33. It is time to act