There were approximately 8.7 billion Internet-connected devices in 2012.

Experts in the finance world — especially advisors — are realizing how important social media is to their business. The ways in which consumers receive and understand information have greatly shifted as technology has changed. In a panel discussion at the Insured Retirement Institute (IRI) 2014 Vision conference in Williamsburg, Virginia, social media aficionados shared insights on how to leverage social media to build and maintain a successful business.  

“Social media gives a window to what clients are doing on a day-to-day basis,” said Jamie Cox, managing partner with Harris Financial Group. He said older clients were more likely than millennials to engage with him on social media. So focusing more on millennial clients in the social sphere may not be the most effective strategy. In fact, he said, advisors should make the extra push to engage with their baby boomer and Generation X clients.

Sarah Pedersen, a managing director at Hearsay Social who moderated the session, said that many successful companies are beginning to navigate complex compliance regulations in order to jump into social media.

Tasks such as making sure paper compliance regulations translate into the social media sphere are among the hurdles firms have to clear. However, despite the regulatory challenges, “many companies would take on this headache of using social media because it’s a tool that many of their clients want,” said Valentina Chtchedrine, executive editor and director of digital strategy with Morgan Stanley.

There is also fear that an advisor could miss out on an opportunity — this could be one reason why the shift to social media has been so strong, according to Chris Du Bois, vice president of interactive marketing and strategy with Allianz Life Insurance Co. “There is an eye toward cultivating relationships and creating advocates, and social media is a big part of that because you don’t want to miss out,” Du Bois said.

A big part indeed: there were approximately 8.7 billion Internet-connected devices in 2012, according to Forbes, and much of the time on those device is spent using social media. “More and more time is being spent on digital, so that is a strong influence on the need for social media,” Du Bois said.

Firms also have to be cognizant of the fact that if one or 10 people makes a compliance mistake it can reflect poorly on the whole firm. “We want the advisor to have authenticity of dialogue, but we need to watch the types of thing the brand will allow,” Chtchedrine said.

One way a firm can determine if its program is successful is to see how many partnerships it gets after implementing the program, according to Pedersen. She says executive-level engagement is important as well.

“The companies whose CEOs and executives are tweeting and posting [are] by far the most successful when it comes to client engagement,” Pedersen said.

As robo-advisors push into the general advisor space, advisors are driven to find a niche in order to differentiate themselves. Cox believes that “there is no better way to specialize, especially for smaller firms” than by leveraging social media.

Check out How 3 Advisors Handle Social Media Compliance on ThinkAdvisor.