Monday, September 14, 2009

9/11 and 15/11: Lives versus lucre

This post was written in the back seat of a yellow cab on arrival into New York on 9/11 2009, and just a few days short of the one year anniversary of Lehmann Brothers declaring bankruptcy.

Both events caused great fear. How our trusted institutions (governments, corporates in particular) emerged from those events has been defining, with trust intact or in tatters.

Reputation research tells us that in times of crisis, it is vision and leadership that define our reputations.

My experience on 9/11 2001 was one of being torn between the job (then head of external communications for a listed insurer) and concern for colleagues and friends in New York.

The immediate concern for listed insurers and airlines in Australia before the ASX opened was to know what to say to the market and whether or not to allow their stock to trade. Many senior people I knew were shocked, bewildered and simply unsure what to do next.

Fortunately I had the support of a great consultant. He'd seen the news the night before and spent much of his night trying to track down family in New York. He'd also seen what happened to airline and insurance stocks in US trading before the market closed. He gave my colleagues and I good advice, and he was there for us when we needed him.

As a company we were able to assess our position quickly and make sensible representations to the ASX. Those initial assessments proved correct and the market rewarded us for it.

Another listed insurer didn't get their market communication right. It very nearly cost them everthing as their share price dropped and market rumour took hold. Their reputation took a huge hit.

On 15 September 2008 and I arrived in New York to attend an investment communication conference. The news was all about Lehmann. The next day it was all about which bank was next to collapse. It seemed no one was safe. New Yorkers, according to the popular news, were already converting cash to gold bullion in mid-town as fear took hold of markets and the world banking system fought for its life.

This time I was the consultant. It was an extraordinary year of helping clients fight for their reputations or, in some cases, their very survival.

For better or worse Australia seemed to lag the US and Europe in feeling the impact of Lehmann. That meant I could advise clients having seen and heard first-hand how the issues were dealt with globally.

Again, vision and leadership have determined reputation post-crisis.

Speed, coherency and appropriateness of response to unexpected events can make or break reputation.

Plenty of businesses didn't make it through the last year. For those that did there are plenty of lessons.

First and foremost, trust is everything.

Sunday, September 13, 2009

Financial institutions' exponential online growth - 54 on twitter to over 600 in less than 6 months??

Now here's a really useful blog for anyone interested in financial services online pr and social media. Visible-Banking, out of the UK, tracks, among other things, the growth of financial institutions (FIs) online.

From a mere 54 in March 2009 to a whopping 606 more recently!

We are talking here about banks, credit unions, fund / asset managers, insurers, credit card issuers and others who maybe:
  • blogging
  • on Facebook
  • posting to YouTube
  • running online communities
  • providing podcasts
  • launching innovation labs
  • maybe have RSS feeds
  • providing webcasts or TV
  • have a wiki....and more.
Another blog to watch, this time from the US, is Rock the Boat Marketing, a social media directory of asset managers, broker-dealers, financial advisers and media.

Saturday, September 12, 2009

Network science and why it will change what we do

En route to the US to attend the PAICR conference I watched a documentary about network science. It helped explain why financial services (and many other) marketing and PR efforts are seemingly unpredictably successful or unsuccessful. And why measurment remains a challenge.

In short, my takeout is that relying on opinion leaders or influencers is an unproven and probably unsuccessful way to change opinions and behaviour.

The implications for marketing and PR are huge.

If I have it right, it means:

- Average people are just as likely to start a trend as the more connected among a population
- A product, service or idea won't be successful unless it's time is right
- If the time is right an idea, product or service will spread incredibly rapidly

Our job as marketers or communators then is to do what I was taught at uni - make stuff people want. I beleive it was more appropriately called "the marketing concept" and it followed on from what was taught in high school economics - consumer sovereignty.

More appropriately to the finance sector, only sell services or ideas when they will add value and the conditions are right for clients or investors to take them up.

This Fast Company article about Duncan Watts' work talks more about why targetting opinion leaders is a waster of time.

PS In 1992, I dropped my 2/rds complete Honours thesis about Roger's diffusion of innovation framework and social change communication. Sounds like that was a better call than I realised at the time!

Sunday, September 06, 2009

Top 3 questions & answers about social media and wealth But who knows tomorrow?

Every time we talk to clients and colleagues about social media we're asked, almost invariably, a standard battery of questions. Here are the questions, their answers today, and some thoughts about what those answers will be in the future.

Before I get into the Q & A here's the summary: you already know your business and its messages – social media is just about ensuring you're heard in a new space.

What our clients are finding is this: with just a little help it CAN be done, it will soon HAVE to be part of business as usual and their colleagues often pick it up FASTER than they expect.

Question 1: Does this whole social media thing really matter for those of us in financial services/wealth management/the investment industry and our clients?

Answer: Hmmm. Yes. A lot. Already. And way more in 3, 6 and 12 months.

In the future? I'd guess that in two years you'll look back and rue it if you didn't commit now to 'owning the ink' in your space. Why? Let's see...

Question 2: Why does social media matter?

Answer: The short answer is that social media can't be controlled by brands the way current marcomms can be. And yet it is far more influential. A bit like public relations and media. Media has its own agenda and it's not your marketing agenda - imagine that on speed. Imagine every client prospect who touches your business having an opinion online. Now that's why social media matters. And why online PR is a critical capability to be built now, not later.

Joe Pulizzi of junta42 gave a guest spot to Kenneth Weiss last week. Ken's blog called Your content, Their Content & The Brand (and his new book Slightware) is just one of many eloquent arguments about why, in future, social media will matter more than almost any current form of marketing communication.

Question 3: What should we do?

Answer: Ideally, develop a full social media strategy with a progressive rollout over time. It's not expensive, it's building capability you'll need in future and it will help protect your reputation now. It may help you right now with web traffic and your conventional PR.

If not a full strategy, then at least watch the online conversations about your brand, services or spokespeople.

And protect your reputation by owning your own brand in the major social media forums.

The last thing you want is someone out there doing the equivalent of tweeting in your name before you even know twitter exists.

So start following before it's too late!

PS Check out these two blogs relevant to financial services and social media:
1. David Meerman Scott's blog DMS is the online PR guru. My colleague Jo Cross attended his one day conference in Melbourne recently and came away will a gold mine of notes. Email me for the notes.
2. Visible Banking. It's a blog on social media for financial services. Some good tips.

Day Two at the 9th Annual Wraps, Platforms & Masterfunds Conference

Bruce Madden, co-founder and Director of BlueChip Communication, attended Day Two of the Wraps, Platforms and Masterfunds Conference in the Hunter Valley. Here is his take on the day.

To summarise the mood of the retail IDPS industry, gathered together to discuss vital business matters in the Hunter Valley these past two days, one reaches for synonyms to describe the twin notions of fear and rejuvenation.

The fear bit is easy, but type 'rejuvenation' and hit Shift F7 on your Microsoft Word software and a number of useful ideas pop up, including:

Transformation; upgrading; innovation; reconstruction; renewal; renovation; rebuilding and revolution.

These aptly describe the challenge and opportunity ahead of the master funds and wrap industry in these post GFC days of an uncertain future, and a number of 'wildcard unknowns' posed by the Cooper and Henry Reviews and the Ripoll Parliamentary Joint Committee inquiry.

As a Financial Services communication consultancy, our firm spends much time thinking hard about how the entire FS industry - from retail advice to unit trusts and platforms to industry super and SMSFs - will fare and communicate to their stakeholders moving forward. The great challenge our industry faces today is that - even with increased government regulatory intervention, no single sector or interest can prosper in isolation.

For example, much has been made about the 'us-versus-them' dynamic that has characterized the retail and industry fund sectors. I sense a softening of this perception - that this view is seen as a crude and unhelpful depiction of a more complex dynamic. In fact, as was discussed at this morning's session, there is greater interdependence and co-operation required from all sectors, particularly the retail platforms and industry funds.

An example eloquently cited by Tria Investment Partners partner Andrew Baker is the provision of advice: how does an average Industry Fund, with $15bn FUM, and 750,000 members find a solution to its looming advice service problem? As Andrew posed: the industry funds have a buy or build mentality: if they don't buy in services, they will build it themselves. Either way, there is great opportunity both for the retail industry to remove its real or perceived conflicts and for each of the sectors to commence productive discussions about delivering to the needs of Australians.

That's the rejuvenation part - for the retail industry to throw out the old, embracing a new, transformational system of innovation built around what is appropriate, ethical and transparent for the end consumer.

So much for the challenge: what about the fear in this equation?

To be blunt: the retail industry's greatest fears are that the Cooper Review makes sweeping, revolutionary recommendations that shoot an arrow head deep into the heart of its current model.

That the Cooper barb pierces the current bloat of platform rebates, commissions, preferred partner schemes, volume bonuses etc; that he also mandates for a simple, embedded advice/product model at one per cent MER; that he renders unviable any underperforming investment managers who take a fee for delivering benchmark or sub-benchmark performance; that greater transparency prevails which may threaten existing business models.

There is also the legitimate fear that market forces will not be allowed to prevail - replaced by further government intervention, or a system of interventionist product creation delivered by well-meaning but naïve public servants in Treasury.

The ultimate challenge - as the retail industry spends the coming weeks and months reflecting on these issues and drawing up its submissions - is to find some greater harmony beyond the political rhetoric and commercial interest.

To build a viable and saleable business model that sustains healthy outcomes for all industry stakeholders, which transcends the unhelpful dogma approach. Sound simple?

The inventor of such a system would surely be up for a Nobel Peace Prize.

Day One at the 9th Annual Wraps, Platforms & Masterfunds Conference

Bruce Madden is my fellow co-founder and a Director of BlueChip Communication. We attended one of the major Australian wealth management industry events together last week. Here's his summary of Day 1

Called "After the Storm" the 9th Annual Wraps, Platforms and Masterfunds Conference commenced in the Hunter Valley, NSW last Thursday, 3 September.

The event has attracted over 200 delegates from the retail financial services industry to debate and unravel the events following the Global Financial Crisis, and the what next for an industry under the pressure of several government inquiries (Ripoll, Cooper, Henry et al); a disenfranchised investor base and the prospect of looming regulation.

The primary themes?

There were a few but chief among them was trust. Or more pointedly, how to regain the trust of the poor burned investor. Perhaps somewhat curiously, or in recognition of the primary role that financial planners play with the industry's overall reputation, the conference spent much of the day debating the role of advice and the planning industry.

My view is that this is a clear sign that master funds and wrap administration platforms remain inextricably linked to the advice process (i.e.: a platform is a product not a service, and it is a product that is sold, not bought) - various speakers discussed their strategy to overcome the risk of further fragmentation of their reputation among investors.

MLC, which through its platform, Master Key, eschewed adviser commissions in 2006, stood to bask in the warm glow of vindication following its courageous public shift three years ago. Richard Nunn, the Head of Advice and Marketing at MLC / NAB described how the inquiry rate from advisers seeking to join the MLC affiliated advice businesses - in light of the many signals pointing to the demise of commissions - had recently increased markedly.

CBA Distribution Head, Paul Barrett, described the need to drive greater comprehension of financial products and services among the end investor, so that "all parts of the value chain take responsibility for their actions." In other words, creating better informed consent from investors about where their money is being invested and why. Or, put another way, to stop outsourcing our intelligence.

Other trends observed? The excellent research of Investment Trends showed advisers seeking safe investment harbours by investing in cash, and direct 'blue chip' shares; the rise of ETFs and indexing as investment products (driven by the desire to reduce costs wherever possible); an increase in the interest of using capital protected structured product (a la AXA North), and believe it or not, the selective increased use of gearing strategies on the basis of historically low asset prices, coupled with low interest rates... (now think about that for a mixed bag of counterintuitive trends!)

Other themes explored included new technology (including an excellent run down of BlueChip client Payment Adviser and its smart technology) and the external threats of regulation, markets and of course managing one's reputation (and FUM) after a crisis.