A broad survey by Putnam Investments of advisors’ use of social media has found that wirehouse advisors are using social media more than their independent contractor or RIA brethren, and that they’re benefiting more in terms of gaining new clients and attracting more assets.
More than 700 advisors comprising all business models, geographies, ages and genders were surveyed by BrightWork Partners on Putnam’s behalf in the third quarter; the 729 advisor participants were required to have provided advice to retail clients for at least two years.
Following up on smaller surveys first begun in 2012, the Putnam Investments 2014 Social Advisor Study found that, over all, 75% of advisors are using some form of social media for business purposes, and of that number, 66% said their social media participation had resulted in new clients, compared with 49% in 2013’s study.
Those new clients are also quite substantial: 39% of respondents who reported gaining new clients through social media gained new assets of more than $1 million, with a median gain of $1.6 million and an average gain of $5.5 million.
The survey found that 83% of wirehouse advisors use social media for business, with the same percentage saying they’ve gained clients through social, with an average asset gain of $9.6 million and a median of $6.0 million. As might be expected, 77% of the wirehouse participants in the survey said they give social media a significant marketing role.
Mark McKenna, head of global marketing for Putnam Investments, said in an interview Wednesday that “the wires pop out” of the survey findings “because they’ve got game now” in social media. Moreover, through employing technology firms like Hearsay Social and training programs, including those run by Putnam itself, “compliance has shrunk” as a concern of the wirehouses in particular and broker-dealers in general. “Firms have figured it out,” McKenna said.
It’s not just wirehouse firms that have figured it out, McKenna suggested, since “lots of advisors are growing their businesses” through social media. “Digital is replacing public seminars, phone calls and even email” in finding new client prospects, McKenna argued.
The survey found that advisors are using multiple social media platforms: an average of three across all advisor business models, though wirehouse advisors report using four on average.
There is a “fragmenting” of social media preferences, Putnam says: advisors reporting they use only one network are down to 25% from last year’s 33%, while those using four or more networks more than doubled, from 11% to 25%. However, Putnam thinks that “the number of advisors using social media for business may have hit a wall,” since of those who said they’re not currently active in social media, “only 16% are ‘absolutely certain or very likely’” to start doing so over the next three years. McKenna said that advisors who are “getting it are getting it in a big way.”
Gender and Age
Female advisors are using social networks more than the average advisor — 82% of women say they use social for business purposes vs. 75% of all advisors. Women are also bigger users of Facebook, with McKenna noting “women are more facile on Facebook.” Seventy-one percent of female advisors reported that they gained clients through social media, with an average asset gain of $5.6 million; 67% of women say they give social media a “significant marketing role.”
As for younger advisors, 94% of respondents under 30 use social media for business purposes, with 80% saying they’ve gotten new clients through social media. In addition, 31% of advisors under 30 prefer smartphones as their access device of choice for social media, about the same percentage who use stationary or docked computers, which Putnam states “are strongly preferred” by advisors over 50.
McKenna says another trend he’s seen is that more advisors are “taking their personal passions online,” which more firms are encouraging as a way to attract new clients and assets.
The overall social media adoption rate and the success advisors are finding in attracting new clients, McKenna says, is resulting in advisor-client relationships being “forever changed."
--- Check out 5 Ways to Build Trust With Women Using Social Media on ThinkAdvisor.