The San Francisco firm’s success solved a compliance problem, but authenticity-at-scale-by-bots is still a grail to reach
Clara Shih co-founded Hearsay Systems in 2009 to make stiff, staid financial advisors “authentic” to clients. Eleven years later–as she hands off the CEO baton–the refrain is similar.
“The first wave of digital transformation in financial services was automation and self-service,” she writes on LinkedIn.
“Validated by the pandemic, this next wave is about authentic engagement at scale– a category Hearsay has established and will fuel its next chapter of huge growth.”
The idea is to make them fearless about augmenting their sales efforts with social media without fear of tripping over FINRA rules. Showing authenticity online at least surpasses the soul-killing websites where advisor mugshots appear.
That next chapter of automated online interactive presence will be written by Shih’s handpicked replacement, Mike Boese. He takes the reins as CEO seven months after learning the ropes sitting in the chief operating officer’s seat. See: How Facebook’s unfriendly new privacy strictures are edging RIAs into the social media monster’s business-page boonies
The well-traveled exec — with time at Oracle, PeopleSoft, SAP and Taleo — has the skillset to “scale and thread cross-functional processes,” Shih explained in her parting letter on LinkedIn.
“As co-founder and CEO, I’ve always done what it takes to make Hearsay successful,” she added in the letter. “Today, I’ve decided what Hearsay needs to be successful for the next decade is a new CEO.”
Uphill battle
Though Boese has strong credentials, it may be asking too much for him to automate communications that inculcate an advisor-client level of trust, says Amy Parvaneh, principal of Select Advisors Institute in Los Angeles.
“This is going to be an uphill battle for them” she says. “It’s pretty much impossible.”
What makes Boese’s job such a steep climb is a shift in the principal challenge, from doing social media compliantly, to doing it effectively, says April Rudin, principal of the Rudin Group of New York. [Full disclosure: Rudin helps a competitor, Grapevine6, with marketing.]
“She probably knew exactly what she was doing,” she says, having had a Zoom call with her this summer. “She’s as smart and innovative as they get. Clara can probably go do that somewhere else.”
Trust business
Yes, but it’ll come after sleeping off 11 years of adrenaline and airports, Shih said.
“Over the next several months, I’ll take some time off to recover from the millions of miles I’ve traveled in the last decade, spend quality time with family and then figure out what’s next.”
Shih will also help “from the wings” as executive chairwoman to keep Hearsay airborn, she adds.
But all the managerial competency in the world may not thread a needle with no eye, Parvaneh, added.
“This is a trust business,” she says. “It’s like you can’t scale family law. You have to go through the emotions. You have to go through the psychology. If you try to create a ‘voice’ for an advisor, you’re going to look like a robot.”
Shih, now 38, explained her vision for projecting authenticity from professional to investor to Bloomberg in 2012 when she was 30.
“You have to be where your customers are,” she says. “Sometimes, people forget that it has to be a two-way conversation, or even a multiway conversation.
“It doesn’t work if you only talk about yourself, or just listen and say nothing. That’s true for individuals, and it’s true for companies.”
Stunned, inspired
In her letter, Shih talks about how she discovered how much of a compliance challenge it can be for a company that uses social media for marketing exposure. See: 5 ways for RIAs to avoid social media and ‘holistic’ wealth management overreaches in a share-happy e-world
“We were in Boston visiting a prospective Fortune 500 customer. Our prospect cut to the chase– she wanted to know whether Hearsay could increase her laptop storage capacity.
“She turned her computer toward us, and we could see that her desktop was littered with thousands of image files.
“It turned out that she and her team spent their days manually screenshotting every one of their firm’s thousands of financial advisors’ LinkedIn profiles every hour in order to comply with FINRA advertising rules.
“Their laptops were literally running out of space. We left stunned and inspired.”
