A significant portion of advisors do not use social media for business purposes, according to a new Practical Perspectives report.
Roughly 3 in 10 advisors currently do not use social media for business purposes, the study finds, and fewer than half of these advisors expect to begin using social media in the next 12 months.
Of the advisors that do use social media as part of their business, a significant portion of advisors only started during the past two years. While the majority of the social media users (39 percent) have at least two years of experience, 17 percent only started using social media within the past two years.
And roughly 1 in 7 advisors began using social media in the past year.
“Most advisors use social media and they expect their usage to continue to grow in the coming year, but many have yet to fully integrate this medium into their regular activities,” Howard Schneider, president of Practical Perspectives and author of the report, said in a statement.
The report, How Financial Advisors Use Social Media – Trends and Opportunities 2016, is based on input from more than 600 financial advisors, which includes full-service brokers, independent brokers, financial planners and registered investment advisors (RIAs).
What’s holding advisors back?
According to the report, concerns related to compliance and firm policies are the main reason advisors have yet to begin using social media within their practices.
More than 6 in 10 advisors perceive that the key challenge in using social media relates to firm policies or compliance, the report finds. According to Practical Perspectives, this has grown over the past year.
The report also addresses other key challenges to advisors in using social media effectively within a practice.
According to the report, 46 percent of advisors admit challenges related to having sufficient time to manage and maintain social media. The report also finds that 42 percent are uncertain about best practices for social media and 38 percent say social media is a low priority compared to other efforts.
Who’s ahead of the game? RIAs and youngsters.
Because RIAs are generally less restricted than their wirehouse or regional advisor counterparts in using social media, the report finds that RIAs appear to be further ahead of the curve in leveraging social media capabilities.
According to the report, advisors who don’t use social media are most prevalent among independent brokers and regional advisors; 21 percent and 16 percent respectively don’t use social media compared with 13 percent of RIAs.
Wirehouse advisors reflect a larger share of “less experienced” social media users compared to RIAs. While 29 percent of wirehouse advisors report being “less expereicned”, 17 percent of RIAs say the same.
The report finds that RIAs were also more likely to be “early adopters” of social media in the business realm. The study finds that almost half of the RIAs who use social media for business started doing so at least two years ago. In comparison, only 26 percent of regional advisors who use social media in their business started doing so in the same time period.
The study also finds that younger advisors “not surprisingly” are more likely to both be engaged with social media and have incorporated social media into their business approach.
Advisors age 40 or younger are more likely to be “very experienced” (23 percent) or “somewhat experienced” (45 percent) users of social media for business purposes. In contrast, far fewer advisors who are over age 60 are “very experienced” (7 percent) or “somewhat experienced” (28 percent) users.
The study also finds a significant portion (26 percent) of the 60-and-over crowd don’t use social media compared to the under-40 crowd (10 percent).
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