If you’ve been following this blog for a while, you know that Corporate Insight has been monitoring financial services firms and their use of social media for over a year now. In late 2008, we published the industry’s first comprehensive study of the subject, Social Media: Trends and Tactics in the Financial Services Industry. The report looked at the way firms use tools like blogs, communities and forums to engage consumers and provided dozens of recommendations to help financial institutions navigate this new terrain.

One of our findings from the Social Media report was that the mutual fund industry was more conservative about social media than any other segment Corporate Insight tracks. That includes annuity issuers, banks, brokerages and credit card issuers. At the time we published the report, none of the 20 or so fund firms we monitor had experimented with publicly visible blogs or communities, for instance, let alone actively used sites like Facebook and Twitter to reach out to consumers. Well, Vanguard’s recent forays in the space suggest that this situation may finally be changing. Continue Reading »

Recently, I had the privilege of leading a panel discussion at the Mutual Fund Education Alliance (MFEA) e-Commerce summit in Denver. The topic focused on how fund companies can leverage their websites to help advisors during the current economic conditions and I was joined by Philip Parrotta, head of marketing for DWS Investments, and Ted Stauderman, Director, Marketing Services and eCommerce, for Calvert Investments. It was a great discussion and a few themes emerged that are worth sharing.

Continue Reading »

We are considering adding Raymond James to our coverage of firms and recently began the account opening process. The following phone exchange shows how one firm is adjusting:

Me: “I am interested in possibly opening an account. Are there any minimum balance requirements?”

Raymond James rep: “Ah, no. Not anymore.”

Me: “A dollar and a half now gets you in the door, huh?”

RJ: “Pretty much.”

Times are hard.

According to an article in the Wall Street Journal, the Obama administration is proposing new taxes for life insurers to the tune of nearly $13 billion over the next ten years. The new taxes would restrict exemptions associated with the purchase of certain insurance products, especially corporate-owned life insurance.

Last week, many of the Nation’s top life insurers were offered access to treasury funds under TARP. Some of the firms applied to TARP several months ago and have since increased capital; therefore they may opt to reject government assistance. While not necessarily related, the timing of the potential tax proposals (falling on the heels of offered assistance) creates an interesting visage.

Having eliminated or scaled back so many benefits and riders already, it will be interesting to see whether or not the fallout from the proposed taxes would target annuity products specifically. Fixed annuity sales have skyrocketed recently as investors and retirees are seeking a conservative retirement vehicle. The proposed tax increases would most likely hurt overall insurance sales; something the insurance industry is likely to fight tooth and nail as it tries to navigate the economic crisis.

Now that Oprah’s Twittering, it may feel like the whole world has suddenly jumped on the Twitter bandwagon. A number of financial services firms, however, have been using Twitter for more than year a now, as a vehicle for both promotion and customer service. We’ve been interviewed on the subject recently by publications as diverse as USA Today and Wall Street & Technology and we discussed it in last year’s Social Media report. Wachovia, one of the first firms we track to establish a Twitter presence, has used Twitter to answer customer questions and, of late, post updates regarding its merger with Wells Fargo.

Up until recently we had not seen any firms using Twitter as an extension of traditional private site functions. This month, however, Zecco announced that customers could now receive account alerts as direct messages through Twitter. Twitter seems like an ideal portal for alerts. Active Twitter users check their accounts throughout the day, both on their computer and on their cell phone, meaning that the chances of them seeing an account alert are high. And for Zecco, a firm that generally attracts younger, computer-savvy customers, the new Twitter alerts allow the firm to integrate its brand and service with a product many of its customers likely use.

Of course, there was more than just Twittering going during a busy April that saw a number of major changes. Continue Reading »

Yesterday, CNBC aired this lively debate on the card industry:

It should come as a surprise to no one that the credit card industry is squarely in the crosshairs of congress and the Obama administration. Unfortunately, that also means the media will have a field day vilifying the industry in general. Credit card issuers need to get out ahead of this and explain their side of reduction in credit lines, increases in fees, and so forth. It might also help if the industry at large defended the virtues of credit and how it helps consumers when used responsibly. It is going to be a hard, lopsided fight. But it needs to be engaged.

Last Thursday, we attended a panel discussion hosted by the Financial Communications Society (FCS) entitled Social Networking 101. According to the organizers, the event was originally intended for an audience of 50 but the level of interest was so high they were forced to find a larger room; in the end, roughly 100 people attended the discussion. Continue Reading »