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An Asset Manager Begins to Tweet

by Lee

Last week featured an important, but largely unnoticed, milestone in our industry. Bob Reynolds, CEO of Putnam Investments, joined Twitter (@robertlreynolds). To my knowledge, he is the first CEO of a major mutual fund company or insurance firm who has personally embraced the significant opportunities presented by social media outlets, such as Twitter, YouTube, Facebook, etc.

This step is an important public representation of the changes that Mr. Reynolds has brought to Putnam over the past year, and illustrates the firm's commitment to increased transparency and innovation, as well as a recognition that rebuilding the Putnam brand will take time and effort.

For the industry, Putnam's move to social media represents yet another acknowledgement that communications are changing. As we wrote in this month's Industry Analysis brief, advisors used to learn about asset managers and their products from word of mouth, wholesalers, Morningstar, advertising, and the press. Today, advisors (and investors) rely less on traditional sources and are beginning to embrace social media sites. Firms outside of our industry have embraced this, but most asset managers and insurers have been slow to evolve. H&R Block, for example, uses multiple social media strategies to build awareness of its digital tax services. The firm built profiles on Facebook and MySpace, used YouTube to promote their video content, and leverages Twitter for one-on-one interactions.

We are only beginning to see industry firms recognize the opportunities presented by creating a presence on leading social media sites (e.g. Facebook). Twitter usage has been extremely limited, and primarily focused on the sharing of news and announcements. I would encourage those people that are responsible for a firm's social media strategy to think more creatively about how to truly engage with their customers and prospects online, and to also consider lesser known tools (e.g. Scribd) to help expand their messages beyond their firms' traditional communications channels.

Start by searching for your firm on Twitter - see what people are saying. If they are talking about you, decide how you want to engage with them. If they are not, figure out what you can do to change this.