In my previous posts in this series, I talked about both the risks and benefits of social media for financial services companies. Let’s take a look at a real world example of a company that has embraced social media.
Nutmeg is an online discretionary wealth manager that launched in January 2013. The service enables retail investors to choose from 10 diversified funds according to their risk tolerance, investment goals and time horizon.
Since its inception, Nutmeg has used social media extensively to target millennials—people born since the early 1980s—who are well versed in using online services—and it has reaped the benefits. The company particularly values:
- Immediacy of communication with customers and followers.
- Ability to respond rapidly to messages from the community.
- Opportunity to hear what others are saying about the service—positive and negative.
- Rapid notifications when the website isn’t working or when an error appears on a page.
- A level of conversation with customers that wasn’t possible before.
To manage the risks—strategic, business, regulatory, legal and market—Nutmeg has incorporated its social media policy covering how staff should use their personal accounts into its human resources handbook. The company also:
- Offers guidelines on appropriate conduct for people working in a regulated investment business.
- Educates staff about what is and isn’t appropriate to say on social media. For example, derogatory or promotional remarks and comments on stock prices are not a good idea.
- Controls access to the corporate social media accounts.
- Sets policies about the types of messages that do or do not require a risk warning.
- Reviews all social media messages for compliance and to see whether they’ve produced any feedback, queries or complaints, and if so whether any changes are needed to the social media policy.
Nutmeg considers its use of social media a success, but it cautions that social media is not a customer acquisition tool—yet. Instead, the company uses social media to increase general awareness about investing and to let people know what Nutmeg is doing.