Archive for October, 2011

The Potential Pitfalls of Social Media

Wednesday, October 19th, 2011

Regular readers of this blog will know that I am a very big fan of social media. The caveat, however, is that it must be social media done right. Last night, I witnessed social media gone bad, and it has lessons for everyone.

I was sitting with a friend who happens to be a fan of the Amtrak page on Facebook.┬áThe folks at Amtrak decided to try and be funny in an attempt to connect with their followers. They posted something like “How many Amtrak employees does it take to change a light bulb on a train?” I didn’t really understand the post actually – I think it was a combination at an attempt at humor and again trying to “bond” with their followers.

Well, it failed miserably. For everything good about Amtrak – and it can be a very convenient way to travel on the East Coast – lets just say that they have on-going customer service and service reliability issues. Not something to be made light of if you are one of the many who has been stuck on a train or at Penn Station!

My friend and I sat there amazed at the speed with which the scathing comments came pouring in from followers and “fans” of Amtrak. Perhaps the most memorable was one that answered the above question with something to the affect of “one to hold the bulb and a whole lot to turn the train,” an obviously reference to Amtrak’s lack of efficiency.

It was kind of scary to see the swift and negative reaction to this botched attempt at humor. Someone may – or should – have very well lost his or her job after that one.

The lesson here is that you must always know your audience in social media – because your reputation can be enhanced or ruined so quickly. Before posting anything to a blog, or LinkedIn, or Facebook or Twitter – ask yourself if the message is in keeping with your brand and if there are potential readers/fans/followers that you are going to offend (or even potentially offend). If you have any doubts – don’t press the button!

It takes a long time to develop an on-line reputation and reap the benefits of social media – and the effort is well worth it. But it only takes a nano-second to alienate those that had previously supported you. Think before you post!

Thriving Amid Chaos

Wednesday, October 12th, 2011

Our Q4 newsletter is out and features the new White Paper “Thriving Amid Chaos.” While continuing to demonstrate leadership to your clients is important, you can simultaneously improve your business practices and weather the current economic and financial storm.

Thriving in today’s world relies on a two-pronged approach:

1) Inward-Looking: Control what you can – like how you manage your business – by looking at your 3Ps:

  • People
  • Planning
  • Processes

2) Client-Facing: Communicate more effectively by honing your communications strategy and making sure that your messages are:

  • Clear
  • Consistent
  • Convenient
  • Compelling

Click here to read the entire White Paper. Click here to see the newsletter.

Have a great rest of the quarter – and start thriving despite the chaos.

AK In The Press: Opinion Piece – Why The Bank/Brokerage Marriage Has Failed

Thursday, October 6th, 2011

My piece “Why the Bank/Brokerage Marriage Has Failed” appeared in today’s FundFire. To summarize – the bank/brokerage marriage experiment is a failure that has harmed reputations.

It’s hard enough to be an advisor these days, with the market just finishing its worst quarter since 2008; trying to manage your own business and reassure clients about their financial situation is difficult enough. But advisors at firms such as UBS and Bank of America/Merrill Lynch now have to answer questions about their parent as well.

In the wake of trading scandals at UBS and increased debit card fees at Bank of America, advisors have become “guilty by association,” suffering repetitional risk for things that have nothing to do with them.

But the strains in these relationships go deeper than today’s bad press. Cultural differences are another key reason for the disconnect that exists. The idea of cross-selling synergies created by the addition of a bank’s product lines seems appealing at first blush; the reality, however, is that most advisors will only sell these products on their own terms – they don’t want to be told what to do or coerced into selling anything.

These culture differences extend to compensation issues as well. Advisors are used to “eating what they kill.” This mentality has never really meshed with the more conservative mindset of bank management. While banks have for the most part been smart enough not to alter compensation structures significantly, the cultural disconnect and tension continue.

In fairness, some bank/brokerage marriages seem to be working somewhat better – such as at Wells Fargo Advisors – but in this case, the marriage is based on more of a quasi-independent advisor model. You still have to wonder, however, if the name itself will become a liability sometime in the future here, as it has elsewhere.

One could rightly argue that mismanagement and lack of oversight caused many of the problems that necessitated brokerage firms to seek capital to survive and resulted in these hook-ups. But differences between the cultures are often too great, and in retrospect, attempts to merge the two outfits probably should have been avoided. Perhaps the brokerage arms should have been allowed to remain operating as totally independent units from the start. This would have saved everyone involved a lot of grief.