Advisors’ attitudes toward social media are changing for the better, but few are maximizing its business-growing potential.
Two-thirds of advisors today rank social media’s overall value to their business as “high” or “medium,” a 36% increase from 2010, according to American Century’s fifth annual Financial Professionals Social Media Adoption Study released Thursday.
However, while more financial professionals are seeing more value in social media, “many are still struggling with the best way to use it,” said Jamie Needham, digital marketing strategist for American Century, in a statement. “If leveraged correctly, social media has proven to produce tangible business results, yet only 7% of advisors surveyed chose business building and promotion as their top use of social media.”
The top three uses were reading expert commentary, researching people and monitoring industry and market news.
The study found that nearly 15% of advisors who use social media ranked it as having a “high” overall value to their businesses, roughly twice as many as in 2010 (8%).
In conducting its online survey of 309 financial professionals who are employed as financial advisors, brokers or RIAs, American Century used a 10-point scale, with “high” being a value of eight, nine or 10 and “medium” being four, five, six or seven out of 10. The study was conducted during the first quarter and assessed financial professionals’ attitudes toward LinkedIn, Facebook, Twitter and YouTube.
The bottom three rankings (one, two or three out of 10), also dropped substantially during the five-year period: 40% in 2014 vs. 55% in 2010.
“Only about 22% of the people we surveyed in 2010 felt it was a fad with little value for business,” Needham said. “But now, that number is even smaller — down to 13% — which again speaks to advisors’ increasingly positive perception of social media’s usefulness in their practice.”
Financial professionals’ concerns about social media use have also evolved over the past five years.
While regulatory or compliance issues are still the No. 1 concern, it’s less so now than in 2010: 36% of survey respondents listed these issues as their top concern this year, compared to 47% in 2010.
More advisors today report that they are worried about company or home office restrictions on use, with 19% listing it as their top concern with social media usage vs. only 14% five years ago, the study reported.
Twenty-one percent of respondents listed a potential privacy breach as their top concern in 2014 and 2010.
Check out 10 Most Influential Advisors on Social Media: BrightScope on ThinkAdvisor.