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Financial Advisors: Social Media is Waiting for You, New Clients Will Not


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Written by: Ali Bechtel | Editor Ali 

Social media isn’t just for sharing updates, posting photos and staying in touch with old friends anymore. It is also the best means of reaching a new generation of investors. In fact, nearly 90% of investors use social media but half of them are unable to find their advisors online, or believe they do not use social media at all. Perhaps this is why a recent Putnam Investments survey found that the financial advisors who do use social media are “gaining more and wealthier clients than they were even a year ago.”

Despite the overwhelming support for jumping on the digital bandwagon, there are still advisors who choose to avoid the movement. Brian Hart, founder and president of Flackable, a national public relations agency serving RIAs and other small to mid-sized financial services firms, has bleak news for these late adopters. “The Digital Age will be unforgiving to the advisors refusing to adapt to our evolving business communication landscape.”

In the face of the exponential growth and success of social media as client lead source, why are so many advisors choosing to opt out of this sea of new business opportunity?

“My clients are in their 40s to 70s, they don’t use social media.”

Try telling that to the more than 220 million LinkedIn users over 30. 64 percent of the network’s 347 million members in 200 countries are in the 30 to 65+ age range.  And although some of the other major social platforms are dominated by the younger market, there are still more than 43.5 million Twitter users, and 30 million Facebook users over 50.

What the advisors making this argument fail to understand is that social media is not only a way to communicate with current clients. It is, more importantly, a means of reaching a younger generation of investors who do not want to be sold to, but rather to be educated, engaged, and entertained.   And it works. Putnam Investments’ survey found that two thirds of advisors using social media indicated it helped them gain new clients.

“Using social media is going to lower the perception of my brand.”

“You want your brand to be held at a high standard, kind of like Donald Trump says. His brand is all about quality and luxury and that’s all he wants his brand to be known for. I think advisors should follow suit.” Don Wilde, owner and financial advisor at W Financial is not the only advisor who thinks participating in social media could lower perception of their brand.

Improper use, such as flooding news feeds with promotional content, may alienate prospects but a well planned strategy can initiate new relationships and build trust and engagement.

“The key to social selling is to elevate the online relationship to a more personal level. The mistake many advisors make is that they try to begin the sales process online. That approach is inappropriate and aggressive, and it can jeopardize any trust, credibility or rapport that’s been established,” says Hart. But, he says, “The notion that any level of social media engagement will inherently lower the perception of an advisor’s brand is an archaic point of view, far removed from the reality of our times. The fact is, advisors who take that stance are invisible to a new generation of prospective clients.”

 When implemented correctly, a social media strategy will place businesses in front of prospective clients as a thought leader, a source of necessary information and a recognizable brand.

It also bears mentioning that the Trump Hotel Collection has accounts on Facebook, Twitter, YouTube, FourSquare, Pinterest and Tumblr.

“I need to stay in compliance, and it’s too easy to make a mistake.”

Working in a strictly regulated industry does require a heightened sense of awareness about what is being shared online, but it should not prevent anyone from taking advantage of new technology. Now that the S.E.C. is making policy changes to catch up to the New Media Age, advisors can begin to relax. “Regulatory authorities are finally coming around to this new age of business communication, and it is allowing timid advisors to finally get off the sidelines and into the game,” explained Hart.

What advice do social-savvy advisors have for staying compliant? “Definitely don’t use words like ‘guarantee’ in your posts and make sure you archive your social media profiles for compliance issues,” suggests Mary Beth Storjohann, CFP and founder of Workable Wealth.

Start small.

It is time to stop making excuses and implement a strategy. With so many platforms and different nuances of connecting correctly on each one, it can be a daunting task. Storjohann suggests starting small, spending only 15 minutes a day interacting with others and building networks. Leverage scheduling tools such as Buffer or Hootsuite to save time on content creation and utilize the time set aside each day to make connections.

Identify the networks clients and prospective clients are most active in.

Storjohann uses Twitter as a means to connect with other “talking heads” within the industry and to establish connections with other industry leaders. “It’s really helped to engage conversations from a Gen Y and personal financial planning perspective, and has helped to build my brand within the industry.”

It is also “one of the best digital channels for facilitating subtle familiarity with prospective clients and other key audiences,” according to Hart. He also uses Twitter as a prospecting tool and source of information on competitors on behalf of his clients.  More than half of the new business leads at Flackable originate on Twitter and LinkedIn.

Facebook is the channel for a more consumer focused strategy. Participation in targeted groups has been a direct source to clients for Workable Wealth.

Develop a targeted strategy.

“The most important thing to keep in mind is who your target audience is on each platform and ensure your content is aligned with your audience,” advises Storjohann.

For those new to the social media scene, Hart suggests seeking help. “These once simple networks are now vast, complex digital societies, so unless you have an in-house expert to manage these accounts, consider hiring a consultant to coach you through these new opportunities and challenges. Business won’t just magically come to you when you open an account. It takes advanced growth and engagement strategies to generate real business results.”

Timid advisors no longer have any excuses not to establish an online reputation. Social media not only provides a platform for connecting with current clients and establishing relationships with new ones, it also gives advisors a space to set themselves apart as thought leaders among other members of the industry. For those advisors still using these old excuses, it is time to jump on the digital bandwagon, or get left behind.

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