Investment Firms Try to Find Their Social Media Groove

A recent ranking by research firm Dalbar reveals how Ameriprise, John Hancock, New York Life and Prudential have created winning social media campaigns.


Financial services companies have been slower than their brethren in other industries to embrace social media, but a recent report by Boston-based Dalbar suggests that investment firms may finally be joining the Facebook-enthused Twitterati. In May the independent research firm released its first-ever ranking of social media engagement by financial services firms (awarding them up to five stars). The winners: Ameriprise Financial, John Hancock Financial Services, New York Life Insurance Co. and Prudential Financial.

What does it take to be a top-ranked financial services firm? It used to be enough to attract mega-assets while offering a great lineup of products and excellent customer service. Those qualities are still important, but the bar has been raised. As Facebook, Twitter and LinkedIn have made increasingly deeper inroads into the communications landscape, fund companies have entered a new arena in which to compete with their peers.

“Everyone has skin in the game,” explains Kathleen Whalen, a principal of Dalbar, which has been vetting investment and insurance companies, financial professionals and retirement plan providers since 1976. “This is a huge part of how people communicate these days.”

Dalbar started ranking investment companies in the 1990s on their web site features and functionality, and it views social media prowess as a natural extension. To ferret out the savviest social media players, the firm undertook an in-depth exploration of 60 companies, judging them on two criteria: “follower engagement” (the average percentage of total followers that liked, commented upon or shared) and “intentionally engaging posts” (the percentage of posts meant to initiate engagement).

The winners’ successes provide a road map for other firms to follow, that is, if they want to reach an audience that uses social media.

“We’re a relationship business, not just a transactional business,” says Jon Pauley, who oversees a small team as head of digital strategy and marketing at Ameriprise Financial. “If our prospective clients are on Facebook, that’s where we need to have the conversation.”

Minneapolis-based Ameriprise, with $783 billion in assets under management, was the only investment firm to achieve a five-star rating on its Facebook page. “Those posts that were meant to engage and actually did engage came together to form a superstar of social engagement,” according to the Dalbar report.

John Hancock and New York Life shared top honors for their LinkedIn presences, though each firm garnered only two stars. Boston-based John Hancock was lauded for its skill at soliciting comments from its followers “while still maintaining the professional attitude expected on LinkedIn.” New York Life was given credit for applying “the ideas behind their high engagement posts on other social networks” to LinkedIn.

For its part, Prudential Financial earned top billing for its Twitter presence, with a three-star rating. The Newark, New Jersey–headquartered company’s Twitter posts — often built around interesting questions, like where followers would like to retire — “engage without trying too hard due to their interesting and educational content,” writes Dalbar.

Niharika Shah, vice president of marketing and advertising strategy for Prudential Financial, which has $1.1 trillion in assets under management, says the firm launched its social media campaign with questions about longevity in a 2013 Super Bowl ad on Facebook. Most of its mass consumer engagement is about investing and saving for retirement. “It’s that fine art of balancing who we’re talking to, the platform we’re on and the content we’re bringing to the table,” she explains. The strategy mixes elements of infotainment, product solutions and thought leadership. Shah’s group uses an editorial calendar to plan its information launches and what she calls “a triaging process to handle incoming questions,” with a monitoring team that works 24/7.

Ameriprise began to create a local Facebook and LinkedIn presence for its advisers in 2009, explains Pauley. Each adviser has his or her own web site, which the firm helps set up and maintain; it includes information about the adviser, including a detailed profile, areas of focus and members of the team. Advisers tweet only from a corporate perspective.

“We cultivate clients,” says Pauley, who views each social channel as a cocktail party at which you don’t plan what you’re going to say. The firm’s social media sites are refreshed frequently after contents are tested to see what works and what doesn’t. “We don’t want to sound like a commercial,” he adds. “We’re not just speaking with a megaphone.”

Other financial services research firms are examining social media, albeit to a lesser degree than Dalbar. In January Cambridge, Massachusetts–based Cogent Research, the syndicated division of Market Strategies International, published its annual Advisor Touchpoints report, based on a survey of 4,000 affluent investors. It turns out that 69 percent of those investors use social media. Not surprisingly, Generation Yers (also known as Millennials, born from the late 1980s through the 1990s) are the heaviest users of social media to seek out financial advice. Only 14 percent of those surveyed reported using social media to learn more about advisers; fewer use it for direct communication.

To optimize their social media presence, both Ameriprise and Prudential maintain strong direct relationships with all the networks in order to gauge their next move. Components like privacy features or the look and feel of each outlet can change suddenly. “There’s a lot of potential in leveraging the capabilities of the Big Three and engaging in more two-way dialogue than we have in the past,” says Prudential’s Shah. The important lesson, she advises, is not to put all your apples in one basket. “There could be a whole other Twitter in three or four years.”

No matter which social media outlet has supremacy, financial institutions have no choice but to sign on, says Dalbar’s Whalen. “They have to be part of that community because that’s where their clients are.”

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Follow Frances Denmark on Twitter at @francesdenmark.