Recent studies show that the general public and financial services firms are focused on the use of social media. Financial advisors, however, have room to catch up.
“We found that nine out of 10 [financial services] companies currently use social media, and most agreed that compelling content is vital,” said Norah Denley, a senior analyst for distribution and technology research at LIMRA, in a statement in early August. “Posting content that provides value to an audience is just as important—if not more so—as reaching the audience in the first place.”
A recent Pew study, for instance, found that more than two-thirds of all adults who use the Internet on a regular basis rely on social networks.
To understand the industry’s response to this widespread rising use, LIMRA polled 53 large companies in both the United States and Canada. The highlights regarding social media use are:
- Facebook: 65% usage for building community; increasing use as a customer-service channel
- LinkedIn: Close to 70% usage for recruiting
- Twitter: 60% usage for brand awareness
- YouTube: 83% usage for brand awareness
- Google+: 58% usage for brand awareness and building community
“The most popular social media sites continue to grow in influence and a number of new sites are rapidly gaining attention,” LIMRA explained. “Financial services companies are still figuring out where they need to have a presence and where they can abstain.”
Compared with the general public and financial services firms, financial advisors appear to be much slower at adopting social media for their businesses, according to SEI.
SEI polled 200 advisors and found that just 28% said they use social media to promote their practices online; only 31% use it for social engagement. Furthermore, those who use social media do so in a limited fashion.
According to SEI, more than half of respondents said they are experimenting with social media via only LinkedIn profiles. And, close to a-third of those surveyed, 29%, said they have no online presence.
“Whether it’s a lack of time, resources or expertise, it’s clear most advisors haven’t fully committed to social media yet,” said John Anderson, head of practice management for the SEI Advisor Network, in a press release.
“Research shows that the majority of Americans are using social networks; if advisors can reach that audience effectively there is an opportunity for them to reap tangible business benefits,” Anderson explained. “It’s important to note, however, that being consistent and strategic is vital to long-term social media success.”
When asked why they are slow to adopt social media, advisors shared the following issues:
- Broker-dealer concerns: 29%
- Generating frequent and relevant content: 25%
- Future regulatory environment: 21%
- Time and cost: 15%
Ironically, 65% of advisors polled indicated that they use or would like to use social media for client leads, but just 13% said they actually had secured a client through social media.
“I think many advisors want to use social media more, but they’re just not sure how to do it effectively and what resources to dedicate to it,” Jill Ciccarelli Rapps, partner and financial advisor with Ciccarelli Advisory Services in Naples, Fla., said in a statement. “We launched our social media program using a phased process that made sense for our business, and we are beginning to use it regularly to engage current clients and create new relationships.
“We still have a lot to learn, but we believe using social media will be an important step in keeping up awareness of the services we provide to our social media community,” Ciccarelli added. “Patience and consistency are key and after several months, we are beginning to see results from our efforts.”
Still, some firms—from Morgan Stanley (MS) to Raymond James (RJF)—have been taking important steps to encourage broader use of social media by advisors.
In mid-July, for example, Raymond James formed a partnership with Hearsay Social for financial advisors who want to build more customer relationships and grow their businesses through social media. (Previously, it had worked with another IT vendor for such work.)
“Social media engagement is becoming critical to helping advisors manage and build their brands and support their client and prospective client communications,” said Michael White, chief marketing officer at Raymond James, in a press release.
Raymond James says it first moved to help advisors use social media marketing and compliance tools in November 2011. Since then, more than 2,000, or over 33%, of its almost 6,000 North America-based advisors are utilizing these Web-based resources for communicating and interacting with clients.