Advisors, Go Beyond Mere Tweets

Large financial firms have also learned something about the relationship among social media and recruiting and brand, especially in the perception of younger hires. As college students go through school and enter the work force, most are using social media to communicate not only with friends but with their professors. Whether coming from college or having worked for a few years at another company with open access to social media, they have expectations about how they can communicate with coworkers and friends. When some potential recruits discovered they wouldn’t have access to their social media accounts during office hours as a part of regular business (not just personal) communications, their brand impression of the generations-old firm changed to something considerably less favorable and contemporary.  

Advisor’s use of social media today
While collaboration may hold great promise, advisors have experimented with other forms of social media from the earlier days. Advisors are now connecting more with peers and clients via social media, according to a new study from the research firm kasina, What Advisors Do Online 2010:
• More than 75% of all advisor types use social media, rising 7% in the last year.
• Advisors at independent and regional broker-dealers have the largest usage.
• Independent RIAs spend more time using social media daily (33%) compared to the average (22%).
• Fifty-six percent of advisors use YouTube for professional purposes (up from 48% in 2009).
• LinkedIn also proved very popular with 55% of advisors using the professional networking site, with 54% having access from work. They join groups, too—47% joined at least one.
• Advisors use Twitter and Facebook comparatively less often.

Advisors’ social media future
While many advisors view social media as not producing tangible results today, they see significant future potential, according to a study by American Century Investments. When asked about future business use of social media, the 303 financial planners, brokers and RIAs identified the ones they expected to use most often:
• Monitoring industry and market news
• Reading expert commentary and insights
• Researching people (e.g., prospects, contacts, current clients)
• Sharing news or content relevant to clients
• Business promotion and brand building
• Competitive intelligence
• Posting  commentary
• Sharing best practices with peers and colleagues
• Customer feedback and engagement
• Maintaining a professional blog

For some, ROI is here
While many of the most promising uses of social media for advisors may not be easy to measure, some anecdotal evidence and research indicates an actual ROI for some. In a 2010 study by Pershing Advisor Solutions and Aite Group, Creating Growth: The Increased Use of Social Media by Independent Advisors, which included responses from 144 RIAs, social media activity appeared to support practice management:
• Forty-two percent using social media said it has helped them identify prospects
• Thirty-one percent saw it helping to promote awareness of their business
• Twenty-seven percent credited social media with supporting their efforts to differentiate themselves from other advisors
• Twenty percent said social media delivered an increase in revenue or fees from existing clients

“Considering the benefits and business impact they have experienced, it is not surprising that RIAs who use social media on a professional basis are more likely than other advisors to consider social media important for the future,” noted Ron Shevlin, senior analyst at Aite Group. “Still, many advisors will be challenged by their firms’ decisions to limit or prohibit the use of social media because of regulatory and compliance concerns, as well as other factors.”