In the world of corporate brand managers there is a confusion that is present about this phenomenon/force that is social media. As corporations and the people who manage their brands sit at their desks, they stare puzzled at sites like Facebook, YouTube, and Twitter and are reminded of conversations they have had with their children. Conversations where they've made statements like "I just don't get it", "I don't know why I would sign up for one of these sites just to learn what someone had for breakfast", "...it's stupid..." etc. Now, at their desks, they try to make sense of videos, conversations, @mentions, and ratings and reviews which are severely impacting, overtaking, and undermining their efforts to control the way the consumer perceives, interacts, and talks about their products. In one perfect example United Airlines' lack of compassion and proactive service effort caught up with them. David Carroll and his band,Sons of Maxwell, produced nothing short of a professional quality song and video describing how United broke David's guitar and did nothing about it. This video collected some 3 million views within a week of its posting.

Why is this happening?
Among the many status updates and interactions that consumers have with the web, there is an emerging trend. Once which allows for consumers to voice their opinion on any and everything. What has surprisingly worked it's way into these conversations are reviews of their experiences and the products and brands that are associated. A low barrier to entry to technology, along with our collective desire to be heard, have led consumers to feel more empowered than ever. This was never more evident to me personally than when my wife (who recently signed up for twitter despite making many of the comments above) took aggressively to herTweetieiPhone app (which I installed of course) to offer her discontent withCNN'scoverage of Michael Jackson's death. After a few intense minutes of thought she launched to following into thetwittershpere:

"CNN you are disgusting. Have some respect. I am having a hard time stomaching your so called experts. Changing the channel."

This comment in the past would never leave the living room but now it is added to millions of other people who perhaps feel the same way, and that is the danger for brands and also the very things that can protect consumers.

Why are companies hesitating to embrace their customers voice?
As executives at corporations wrestle with this phenomenon, the mental gymnastics that accompany the decision to to enable or disable their consumers voice tires them. While they can't necessarily afford to ignore this trend they know that by enabling it they are opening themselves up to negative reviews. What about all those consumers that post negative reviews? What about that old adage that people don't talk about good experiences...only bad? JeffBezosmay have summed up the concept of negative review best:

"Early on, Amazon's decision to allow readers to post negative book reviews infuriated publishers, chief executive Jeff Bezos recalls. "We had publishers writing to us, saying, 'Why in the world would you allow negative reviews? Maybe you don't understand your business -- you make money when you sell things. Get rid of the negative reviews, and leave the positive ones.'"

Yes, negative reviews can hurt sales in the short term, but over the long term, allowing criticism builds credibility and helps shoppers decide what to buy, Bezos says: "We don't make money when we sell things; we make money when we help people make purchase decisions."

And, Brett Hurt, CEO of Bazaarvoice(and advisory board member tofabeetle) may have summed up the reality of "bad news travel fast" myth (see here for video). Brett states that based on numerous case studies, data analysis, the enabling of some 59 billion (yup billion) reviews to be read, distribution of rating and reviews posted online boils down to a 4.3 out of 5 stars on average. Illustrating a greater than 85% propensity to post a positive review.

What does it mean for financial advisors, financial advisory firms, and their clients?
This industry specifically has had even a harder time trying to decide what to do about the consumers voice. Strict regulation has been a convenient obstacle for these firms to hide behind in this enable vs. disable decision, but it is catching up with them fast. At http://tweet.fabeetle.com we have some 94 specific searches trolling twitter for the mention of financialadvisors, stock brokers, and financial planners. In two weeks time tweet.fabeetlehas archived over 1178 tweets people mentioning financialadvisors. While twitter is a powerful trend it is a small representation of the online conversation that is happening around financial services and financial services firms. This number should give firms and advisor pause. In addition financial services firms have to consider their regulatory obligations given the nature of certain negative reviews should they choose to host such conversation and this can be problematic. The idea of a negative review in this space transcends potential brand damage and moves to actual filing and reporting requirements (and the associated fines for not doing so). The idea of owning a vehicle that would actively solicit, make available, and distribute the clients voice concerning financialadvisors, the firms they work for, and the products and services they offer, is something that these firms are not quite ready to tackle yet, and I am not sure that I blame them. Most of these firms are still trying to figure out how to monitor email communication in a way that satisfies regulation requirements. That said...the consumer doesn't care, they are going to talk either way.

Currently we know that the usage trend in social media doesn't spike at the demographic that is the target customer of financial advisor or the firms that employ them. But as we sit on the precipice of the largestintergenerationalwealth transfer event in history, and as tools like Facebook and Twitter are rapidly drawing these demographics in, it is a problem they will have to address shortly.

Why is it important to these parties?
In reality a decision to choose a financial advisor is already based on user or consumer generated content. Statistically speaking the majority of people find their financial advisor by referral, but because of the regulation mentioned above, there has not yet been a vehicle that has allowed for the leveraging of this interaction.fabeetlewill and it will benefit all parties and it couldn't be coming at a better time.

First consumers are hungry for information. Lack of transparency combined with one of the worst recessions in history has left clients wondering if they are receiving the right guidance. Many are and many are not. The good guidance needs validation, and the poor needs to be exposed. Second financialadvisorsare in a position where they need to find more clients. Current channels for them to proactively do so are decreasing in utility and so they are relying on their clients to refer them business. Mind you a client that is unsure of their relationship in the first place in many cases. Third, firms are trying to both manage this social media problem and in doing so jockey for position of the some 20 trillion dollars that will become available for their financialadvisorsto manage as the baby boomers retire over the next 10 years.

It's not all bad.
The idea of crowd policing what may be one of the most important decisions that a person can ever make, selecting someone to guide them on the management of their life savings, is something that can make a big impact. A few weeks ago I posted the below graphic.

This is an extreme example but the idea of consumers watching out for each other is a welcome concept. Until fabeetle we have yet to see an effective solution to pull the benefits of social media to the personal wealth management industry. Upon its launch, clients, financial advisors, and firms will have a new way of thinking about their relationship. A way that solves problems and raises the quality of products and services provided.

As we emerge from the worst financial crisis since the depression which was ripe with fraud, scams, and complicated investment structures, the idea of being able to access the opinions, and more importantly the concerns of other people like "you" is something that will have tremendous benefit.