Ellenbecker’s latest investment: Smartphone apps come to financial realm

Despite the fact that investment transactions are now sent around the world with the press of a computer key, the investment world, one of the most regulated industries in the economy, has not really taken social media out for a spin. That is until now. While it didn’t involve heavy-breathing scrutiny from the Securities and Exchange Commission, it wasn’t as simple as launching an app.

The media-savvy Karen Ellenbecker, founder and president of Ellenbecker Investment Group, must have been a track star in a previous life, given the number of hurdles she had to clear in order to launch her new smartphone application, which spotlights Money Sense, her weekly show on WISN Radio in Milwaukee.

It’s another illustration of how social media can help service providers take advantage of consumer habits, once they gain insight into those habits. In Ellenbecker’s case, the epiphany came during a dinner conversation in which a man, who was not an EIG client, remarked that he listened every weekend to the show Ellenbecker has hosted since 1996.

 “It’s been a difficult process, but now that we’ve got it, we’ve paved the way.” – Karen Ellenbecker

When Ellenbecker asked the would-be client why he had not called the firm, he indicated that life gets in the way. “He said, ‘Well, I get really busy on Monday mornings, and you have never called me,’” Ellenbecker stated. “I thought, what a wicked problem. Why would I call? I don’t even know who he is.”

In a subsequent conversation with her friend Dan Burrus, author of Flash Foresight: How to See the Invisible and Do the Impossible, Ellenbecker explained what had happened at dinner. Burrus’ advice was well aligned with the title of his book. “Business owners who listen to you on the weekend come in Monday and are already knee-deep in their work, so they don’t think of the show,” he observed. “You need to find a way to act in the moment when they are interested in what you are saying.”

Burrus pointed out the occasions when people check their email on a smartphone. It could be when they are stopped at traffic lights, getting their hair cut or styled, or waiting in a grocery line. Since everybody’s computer now is essentially in their pocket, Burrus advised Ellenbecker to figure out some way of getting people to contact her when they are ready, which led to the idea of a mobile app.

When she thought about it, Ellenbecker realized that people would hear the show once before it was gone. WISN did not archive the program on its website, so a mobile app seemed like the best way to help her get more mileage out of it.

The fact that the financial services industry is heavily regulated did not prevent the app from being developed, but it did delay the launch. Getting it to clients also took several months of working with the app developer and the compliance department of EIG’s securities and advisory firm, SII Investments, Inc. When Ellenbecker brought the idea to the compliance department, she was met with the encouraging words “absolutely not.”

No ‘real time’ posting

Knowing that compliance had never considered such a thing, and probably only thought of the potential headaches, Ellenbecker kept pushing. Finally, she came up with the idea of taping the show, having the audio transcribed into written text, and sending that to the compliance department, where it could be reviewed and any necessary corrections could made before the text was placed in cyberspace, either on the smartphone app or a mobile website that had to be reformatted for use on smartphones.

As a result, there is no real-time posting, and EIG is restricted to communicating one way with social media. There are stringent rules for the radio show about what can be said when being aired versus what is being posted on the website app, and there are required disclosures.

SII also required Ellenbecker to subscribe to a third-party program to monitor all social media content at a significant cost per year, per outlet (Facebook, Twitter, LinkedIn), plus an initial set-up fee. EIG is not allowed to use client testimonials, so clients cannot post such comments on its Facebook page, and the company must monitor the page to make sure no one posts material that is not allowed. EIG cannot engage in dialogue with anyone through social media – no tweeting back, chatting, or responding to posts on Facebook.

“We can use social media as a one-way communication to give pre-approved information to clients and subscribers,” Ellenbecker said.

Then there was the ease-of-installation goal for the app’s “text to download” function. Consumers don’t visit an “app store” to download Money Sense, they simply text MSAPP to 69302, at which point they receive a return message with a link that starts the download process on the user’s phone. After the app is distributed through a text-messaging delivery service, EIG communicates with its audience via its application content and text messaging.

With the app, consumers can use their smartphones to gain access to transcripts of past broadcasts and to information and links about past and future guests. They also gain the ability to request a phone call or email from EIG at any time, not just during office hours.

Regrets, she has a few

If she had to do it all over again, Ellenbecker would not establish the app in the same piecemeal way. If EIG had worked on Ellenbecker.com, the mobile website, the Money Sense app, and MoneySenseRadio.com at the same time, it would have avoided some of the connectivity issues involved in routing mobile users to the mobile website, and posting material more than once for the different platforms.

Alas, technology is moving so fast that EIG adopted it step-by-step. “Because we did it in pieces, we spent a lot more money,” she acknowledged. “It should be done all at once with one person or vendor because it would cost a lot less.”

Not that she minds being the pioneer who took all the arrows. So far, about 100 people have downloaded the app, but there is real growth potential here. While more people ages 55 and older are visiting social networking sites – the number more than doubled in the past two years, according to Financialplanning.com – some of her clients are older and don’t have smartphones.

Ellenbecker is now working with attorneys and other professionals to send the app to their clients. She also encourages clients to send the app to their children, who are more likely to own smartphones.

Since many people’s computers are in their hands, not just on their desks, Ellenbecker likes the way mobile technology complements other marketing strategies. She noted that one consideration for businesses that depend on local clients is that when Internet searches originate from a mobile device, the number with local intent jumps to more than 50%, according to Microsoft.

In other words, mobile outreach was worth the hassle because local customers are performing local searches, and with more smartphones and tablets sold last year than personal computers, the trend toward mobile devices figures to intensify.

“It’s been great for us,” Ellenbecker stated. “We are the first investment firm to have anything like this, but there have been challenges with compliance and techical issues. It’s been a difficult process, but now that we’ve got it, we’ve paved the way.”

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