Several weeks ago, while covering sites for our Annuity Monitor Update service, we came across a survey on the Vanguard.com public website. Going through the survey (and providing complimentary expert advice), we at first didn’t come across anything particularly notable. A pleasant, colorful interface walked us through twelve questions covering a variety of standard topics – past, current and future desired usage of the Vanguard website, inquiries about personal financial standing. However, upon completing the survey, we were unexpectedly offered a reward for our time and given the option of receiving a $10 check or Amazon.com gift certificate.

Vanguard Online Services Survey

No indication had been given until that point that respondents would be compensated for their time. This is probably a good thing though as the answers are likely to be more honest than if people were taking the survey just for the cash prize at the end.

Six weeks after completing the survey, we received an interesting mailing from the FRC Research Corporation. A standard thank you letter was enclosed thanking us for our participation in the Vanguard survey, with our payment in cash – a crisp 10 dollar bill paper-clipped to the top right hand corner:

Vanguard Survey Letter

We love to see novel marketing strategies that brokerage firms use to promote their products and services. Although Zecco Trading is not yet in our coverage lineup, we hold an account with the firm, allowing us to keep our ear to the pavement as far as their promotions and initiatives. Yesterday, we received an email highlighting the firm’s refer-a-friend program using a very familiar (but rarely seen from brokerage firms) marketing angle – Valentine’s Day. Zecco clients will have $50 cash credited to their account for every referral that opens a new account. The premise of this email is that this bonus will afford clients “more cash to buy gifts for your special someone.” The email finishes with an invitation to “join the Zecco Friends Program and spread the love” followed by a Happy Valentine’s Day.

In our January 2008 Broker Monitor Report, we noted that many firms fail to send holiday cards at the end of the year – something we would expect from our brokers with whom we have a somewhat personal relationship. It is interesting to now see a firm use Valentine’s Day – a holiday we would probably never expect – as a way to grab clients’ attention. While it’s an existing promo, the day-specific spin is a nice touch. Maybe, just maybe, we’ll be their Valentine this year…but we’re not exclusive and have enough love to spread around just in case we get an offer from another firm.

An article in this morning’s Ignites (subscription to Ignites required) announced that the SEC has proposed that registered investment advisors (RIAs) should disclose their ADV Part II online. The first part of the form, which discloses basic information about the advisor and firm, is available online and, frankly, has never struck us as terribly useful. The second part of the form, however, the ADV II, has the meat and according to regulations should be made available to clients upon asking for it.

The problem is, our experience has been that many advisors look at you with two heads when you ask for a copy of this form. It would appear that few of their clients actually do this and thus, the advisor - if they even know what we’re talking about - does not know how to produce the form. For example, in a recent project we did in which we opened nine managed fund accounts, only 1 advisor proactively provided us with the ADV II. With the others, we had to request the form and of those, three did not know what we were referring to.

While we tend to be skeptical of regulatory actions that seem to do nothing but justify the existence of a bureaucracy, putting the ADV II online strikes us a s good idea. After all, the form is already required and making it easily accessible will increase transparency and it should make the advisor’s job a bit easier since.

What does a talking parrot, a live anaconda, a celebrity DJ and a group of Brazilian dancers have in common?

They were all used to promote the DWS Scudder’s Climate Change Fund.

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Esther Dyson has an interesting op-ed in today’s Wall St. Journal that discusses the affect social-network companies (e.g., Facebook) will have on advertising. In it, she discusses how today’s advertising model (targeted ads based on site content) will become less relevant as users continue to tune out such "billboards and cacophony."

The new model, she says, "creates a more trusted environment for reaching high-value, frequent purchasers, whether of airline tickets, electronics, clothes or other items. Where does that leave the less-frequent purchasers? Probably looking to their friends rather than to advertising for advice."

While Ms. Dyson’s focus in this piece is on more consumer-goods products and services, her suggestion also has implications for financial services firms. Assuming more people’s online experience centers around their communities, who are they going to trust more when it comes to suggestions for places to open a brokerage account, bank account, or credit card? Their friends on their social networks most likely.

We’ve talked on this blog and in our research about the impact Web 2.0 has on servicing customers, but it clearly will also have an impact on how financial services acquire those customers in the first place.

In a new study by TiVo, the commercial for E*TRADE FInancial featuing a talking baby who excecutes a trade was the most-viewed commercial, beating offerings from common NFL advertisers such as Pepsi and Doritos. In this age of YouTube, we weren’t surprised that the video was available on the video-sharing service right away. While most comments on the video praise the ad for being both funny and gross at the same time, there was little evidence that any of the viewers would actually open an account with the firm or purchase some of their stock; in fact, we couldn’t find any financial discussion among the comments at all!

There is no shortage of commercials for firm’s tracked by Broker Monitor on YouTube; a quick search turned up Ameriprise’s ads with Dennis Hopper, TD Amertirade’s ads with Sam Waterson, and both the recent rotoscope-animated spots and classic ads for Charles Schwab.

E*TRADE, however, has gone one step further by establishing an official channel on YouTube and currently has seven commercials available for viewing. We think is a step in the right direction. Most advertisers know that in these times, becoming an internet phenomenon is a very cost effective way to attract attention. By setting up a dedicated channel, the firm can produce low-budget ads targeting the web 2.0 crowd directly.

Last week in Broker Monitor, we published our annual Statement Analysis, which benchmarks the brokerage statement we receive. In the review, we provide some recommendations around best practices in statement design such as:

• Be attuned to consistency and flow of information
• Keep related information together
• Pay attention to clarity and simplicity

Clearly, volumes can be written on the design challenges financial firms face when it comes to their statement communications. In determining some of the most important factors, Elizabeth Gooding at Art Plus Technology was very helpful and provided some insights that her firm has learned over the years of statement design and development. Elizabeth was also kind enough to provide us with an article she wrote about reducing noise within client statements, which we provide here. It’s a good read.

Download ReadingRightSignals_2-06.pdf

We’ve commented on how the larger, more established brokerage firms have been slow to adopt Web 2.0 technologies. We recently received an e-mail from TradeKing, a small active-trader focused firm, that shows a neat use of the community and provides a good example of how to drive interest in it among the firm’s client base: