An online connection does not equal a relationship, a report from the Northwestern Mutual Granum Center for Financial Security at The American College found. In fact, advisors who don’t use social media judiciously run the risk of alienating their clients.
“Advisors are being bombarded with messages about social media,” Sharen King, executive director of the Granum Center for Financial Security, said in a statement. “There seems to be an unwritten expectation that as an advisor today, you need to be a savvy social media expert, but what we learned is that while clients are open to receiving information to help them learn more about financial products and services, they still prefer a face-to-face conversation to address their financial needs.”
The report is based on a pair of surveys conducted by Mathew Greenwald & Associates that polled consumers and financial professionals to identify trends and habits on social media. The consumer survey polled more than 1,000 adults ages 25 to 65 with income of at least $50,000 to get their feelings on advisors who use social media. Almost 300 financial advisors, including insurance agents and independent advisors, were asked about how they use social media and what they think their clients want.
The survey found that overall, just 11% of advisors have a comprehensive social media strategy in place.
Just over a third of respondents said they connected online with their advisor because he or she was already a good friend. Some consumers said they were turned off by financial professionals getting too personal online. More than 80% of consumers said they had a negative reaction to advisors sharing things like restaurant recommendations or favorite vacation spots.
Advisors need to understand what their clients want from them online. The survey found 13% of consumers said they connected with their advisor online simply because it made communication easier. The same percentage only connected because they were responding to the advisor’s request. More than a third said they would consider ending their relationship with their advisor if he or she tried to contact them through social media.
Advisors seem to already be aware that they need to tread carefully with their clients on social media. The advisor survey found 60% of advisors don’t use social media because their clients prefer traditional methods for communicating. The majority of consumers said they were cautious about how much financial information they reveal through social media (93%) and less than 12% of consumers said they were open to communicating through social media.