Luddites loathe it; old-school types dismiss it. George Clooney scorns it with a passion. Nevertheless, the digital phenomenon called social media is here to stay. And for a growing number of financial advisors, this 21st century networking technology is proving to be a godsend.
Indeed, social media has become serious business for many financial services firms: Connecting online makes marketing and communicating with clients and prospects easier, faster, more efficient and far more effective than many traditional offline tacks.
One might imagine social media as an enormous digital cocktail party or, better yet, as a parallel universe—an exciting virtual cosmos existing side by side with the physical world.
“Social media really is like a parallel world—an added dimension of opportunity for firms of all sizes. However, you’re the same person in that world: You want to link up who you are in the flesh with who you are online,” says Marie Swift, president-CEO of Impact Communications, a marketing and PR firm, in Kansas City, Missouri, specializing in the financial services industry.
For the past few years, advisors with the four wirehouses and large regional firms have participated in social media to varying degrees. The BDs have been helped by companies like Hearsay Social that facilitate SEC and FINRA compliance requirements.
Raymond James has been a leader in social media, and both its employee advisors and independent FAs have been part of this dynamic activity for the last four years.
“Social media has a well-earned reputation as digital communications’ Wild West. But in our experience with advisors who have used it to communicate in a professional way with clients, prospects and centers of influence looking for thoughtful, insightful communication, we’ve had very little, if any, issues with stereotypical consequences,” says Mike White, chief marketing officer of Raymond James, based in St. Petersburg, Florida.
So, who are advisors meeting in this brave new online world? Happily, people who invest. Studies indeed show that two-thirds of U.S. consumers with investment accounts have profiles on Facebook, LinkedIn or Twitter, according to Amy McIllwain, vice president of social and digital strategy at Moore Communications Group, in Denver. Moore recently acquired McIllwain’s consulting firm, Financial Social Media.
Among wirehouses, Morgan Stanley pioneered the use of LinkedIn, when in 2012 it permitted advisors firm-wide to join the service following a pilot program the previous summer. Now, about 7,700 of MS’s approximately 17,000 FAs are on both LinkedIn and Twitter.
“We’ve had some significant success stories of advisors getting clients from LinkedIn. It’s clearly a very powerful program, where you’re able to ask for a warm introduction,” says Valentina Chtchedrine, executive director of digital marketing strategy for Morgan Stanley Wealth Management, based in Purchase, New York. “We believe that social media is a very useful and effective tool for advisors to use in their marketing and practice management efforts.”
One Morgan Stanley social media coup occurred in 2012, when advisor Mitchell Rock landed a super-size $70 million account through LinkedIn. A senior vice president, he heads The Manhattan Group in New York City.
“LinkedIn establishes your presence to the world,” Rock told this reporter in a ThinkAdvisor story published on Sept. 3, 2013.
About 60% of Raymond James’ advisors are signed up for the BD’s social media platform.
“We saw a really big increase in adoption in the last year,” White notes. A quarter of RJ’s FAs are writing their own posts as opposed to disseminating pre-approved ones.
“[Self-authored] posts have a much higher engagement rate on average—130% to 150% compared to pre-approved posts, which tend to be 10% of that,” White says. All posts, however, must be approved by the firm.
Many advisors enlist coaches and consultants to help them find their social media groove. In a twist, some FAs even hire young interns to teach them the social media ropes.
“At first, it’s a big mind-shift. But once you get into social media, it becomes pretty easy,” Swift says.
On the personal side, social media can be a fun, free-wheeling kick; but business use requires a well-thought-out strategy.
“The important thing is to think: Where is your audience? Who are you trying to reach,” McIlwain says.
The point is to find a niche and direct all your efforts toward that specialty. For instance, if it’s female prospects that you’d like to reach, you might want to use Twitter, Pinterest or Facebook—outlets that attract women. Facebook is also highly popular with baby boomers and retirees of any gender.
Swift encourages clients to decide what they’re seeking to accomplish on each outlet before starting to create and post content. Style, for one, must be appropriate. On LinkedIn, where advisors can network with targeted specialized groups, content should be “business professional at all times,” she says.
“Your Facebook business page should be business casual, stressing leadership and accompanied by photos. Twitter content should be a mix of formal business and a bit personal at times,” Swift adds.
She continues. “If you decide that LinkedIn is where you want to cultivate professional relationships, go big. That’s where prospecting can get good. You follow the thread, try to build a relationship and ask for an introduction.”
Ideally, each social media site will lead visitors to other outlets on which you have a presence. Twitter, for instance, can guide folks to your Web page, blog, Facebook business page, Google Plus page and so on. All the while, prospects are learning more and more about who you are and what you have to offer as a financial advisor.
Alas, social media novices tend to make some big blunders when hopping aboard this fast-moving train.