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Advisors are flocking to social media sites in ever-greater numbers, according to a new study from American Century Investments, though there are still those who find it challenging—and many who find it a concern, both for privacy and compliance purposes.
In American Century’s fourth annual Financial Professionals Social Media Adoption Study, advisors indicated that social media was becoming increasingly important to communicate with clients, saying they used it to share news or information they feel could be important.
In addition, 28% of advisors rely on social media to keep abreast of important research or the opinions of experts in the field, while 14% use it to research people. Business promotion and brand building are the chief reasons 11% use it.
Twitter, surprisingly enough, is not the top social medium of choice for advisors, although there’s been a substantial jump in the numbers of advisors who tweet; 34% now have Twitter accounts, up from 27% last year. LinkedIn is still the top business choice of 75% of advisors.
However, the new frontier of communication is not without its pitfalls—at least in the minds of its users. Survey respondents’ top two fears in 2013 about using social media were the possibility of regulatory or compliance issues, at 42%, and the potential for privacy breaches, at 20%. The former is up from 38% in 2011 (last year’s percentage was the same as this year’s)—perhaps because more companies are putting in place formal social media policies or guidelines. That’s up to 69%; in 2012 only 60% said their firms had policies in place.
Jamie Needham, digital marketing strategist for American Century, said in an interview that although advisors said that regulatory or compliance issues were a top concern, they were participating in social media nonetheless. After all, advisors always have to worry about compliance and regulatory requirements.
“It’s interesting,” she said, “because people are saying that regulatory and compliance are a big concern for them, but you’ll notice a lot of people are active in social media. So every time people put something out there, regulatory compliance is always going to be top of mind for them.”
Needham added, “As people use it more, they are becoming more and more comfortable in participating in newer spaces like social media, and that’s partly because they realize that they need to follow guidelines that are already out there—” such as not making recommendations and not mentioning products, among others—so that “social media doesn’t have to be a difficult thing, or a scary thing, either.”
The fact that more people are sharing news and content than they have in the past, concluded Needham, “speaks to [the fact that although] they have some concerns, I don’t think that will ever go away, [they’re] starting to share the content versus just consuming it. So those fears will be there, but they’re lessened. That comes with experience, knowledge and time.”
Read Do You Really Need to File That Social Media Post With FINRA? on AdvisorOne.