Agents and advisors are increasingly turning to social media to get the word out. And for one very good reason: Such digital marketing tools are helping them garner new clients and investable assets.
Indeed, the more successful insurance and financial professionals have racked up millions more in assets under management (AUM) using LinkedIn, Twitter and (most especially) Facebook. For evidence of this, look no further than a new 2016 report from Putnam Investments, “Advisors are Social.” Conducted by Brightwork Partners, the study interviewed 1,018 U.S. financial advisors — independent and regional broker-dealers nationwide who have advised retail clients for at least two years.
Thanks to savvy social media marketing, these advisors are enjoying bulging Rolodexes and big increases in the client portfolios they manage. Consider these stats:
The average Twitter advisor (an independent, 42-year-old broker-dealer with $95 million in AUM) enjoyed an average aggregate asset gain of $3.8 million within the last year.
The typical LinkedIn advisor (a 44-year-old wirehouse rep with 10 years of experience and $92 in AUM) saw an average asset increase of $5.3 million and (for 73 percent of those polled) new clients.
The average Facebook advisor (a more youthful, 35-year-old broker-dealer with $84 million in AUM) brought in $4.8 million more in investable assets. More than 6 in 10 of them did so by posting business content; “liking” companies, brands and people; and by sharing and commenting on content.
“Advisors who are active on social networks have an advantage and are seeing the greatest gains in AUM,” the Putnam report states. “As participation on the social playing field levels, education and training, along with firm-level support of advanced features and paid promotion and participation, will become increasingly key to advisors’ success.”
“Advisors who are active on social networks have an advantage and are seeing the greatest gains in AUM,” the Putnam report states. (Photo: iStock)
Social networks of choice
Increasingly, the report adds, advisors are pinning their marketing efforts to Facebook and Twitter. While these social networks offer features comparable to LinkedIn (still the most widely used social network) advisors increasingly favor them because of their superior ability to enhance client relationships and cultivate prospects.
Advisors also are tailoring marketing initiatives to the online platforms’ unique capabilities: Solid majorities of the survey respondents use Facebook to improve their referral networks and build their brand (62 percent each).
Twitter is the preferred tool for expanding professional knowledge (52 percent) and promoting oneself as a though leader (50 percent). As for connecting with peers, LinkedIn remains the favorite (64 percent).
Whatever the tool of choice, compliance curbs apply. Nearly 6 in 10 advisors (57 percent) say their firms restrict access to certain devices or locations (home, office or mobile). Also capped: whether and when they can accept invitations to connect; and post business-related content referencing their business affiliation.
The compliance controls have, in some measure, dampened adoption. Sixty-four percent of advisors who don’t plan to use social media point to compliance policies and securities regulations as the reasons. The good news: after rising in earlier Putnam surveys, compliance restrictions have “leveled off.”
The report cites the flexibility of social networks — the ability to customize outreach efforts to meet particular marketing objectives — as a key reason for the upsurge in usage of the social networks. (Photo: Thinkstock)
On the upswing
In tandem with this plateauing, the Putnam survey flags a wider trend: an overall increase in social media usage industry-wide. Eight in 10 advisors now say they secure new clients through social networks, up 49 percent sinch 2013, when Putnam first surveyed advisors on the topic.
Those advisors who don’t use social media are declining in number; most are nearing retirement. But even among pre-retirees, usage is widespread: 6 in 10 financial professionals over age 65 have incorporated digital tools into their marketing efforts. Among all financial professionals, social media adoption stands at 85 percent.
These stats are bound to rise further as advisors get clued into advanced features that can boost the top line and the bottom line. Among them: LinkedIn Sales Navigator, which can quickly identify target prospects; Facebook Ads, an advertising platform that lets you reach audiences segmented by age, location interest and more; as well as third-party analytics tools to measure audience engagement on Twitter.
“Advisors using LinkedIn or Facebook as their primary social network who actively engage in more advanced features are seeing significant gains when compared with similar advisors who stick to the basics,” the study notes. “Notably, advisors who adopt multiple advanced features, including paying for premium access or content placement, are far exceeding the asset gains of their colleagues who are taking a more passive approach to social networking.”
The gains are reflected in other practice objectives. Among them: a substantial increase in “business-building efficiency (cited by 56 percent advisors); and a shortening of closing times compared with conventional methods (85 percent of respondents).
More than half of advisors (56 percent) say that social media has helped them gain new clients “a great deal” compared to traditional networking methods. (PHoto: Thinkstock)
Other research highlights
The Putnam survey also reveals these key findings:
Advisor adoption of social media now stands at 85 percent, with 80 percent of “social advisors” attributing increases in clients and assets under management to social media.
More than half of advisors (56 percent) say that social media has helped them gain new clients “a great deal” compared to traditional networking methods.
While LinkedIn remains the most popular social media platform for conducting business, advisors are increasingly leveraging Facebook and Twitter because these platforms offer “broader, less formal settings” in which to develop client relationships.
Among advisors with assets under management exceeding $100 million, more than a third (35 percent) say that social media “plays a very significant role” in their marketing initiatives.
The average increase in AUM attributed to marketing on all social media (including, in addition to the big three, Google+, Instagram, Pinterest, Snapchat, Tumblr and YouTube) is $8.3 million.
The report cites the flexibility of social networks — the ability to customize outreach efforts to meet particular marketing objectives — as a key reason for the upsurge in usage of the social networks.
“With a number of established social platforms to choose from, and more competing for attention and use, advisors can tailor their approach to suit their networking and marketing needs,” the report states. “Advisors report that social media has significantly shortened the time it takes to find new prospects — many say that social postings have helped prospective clients know and value their brand — and advisors also report it is showing efficiency in closing new business.”
See the charts beginning on the next page for additional highlights from the Putnam social media survey.
We’re on Facebook, are you?
LinkedIn remains the primary social network for 55 percent of advisors. But usage of Facebook is increasing: up to 54 percent in 2016 from 47 percent a year earlier. Twitter and Google+ have enjoyed more modest gains. (Click on chart to enlarge.)
Advisors are increasingly using Facebook to improve referral networks, build brand and cultivate prospects. These objectives overlap with those of LinkedIn and Twitter users. (Click on chart to enlarge.)
Those advisors who are using social media effectively are seeing big gains. The average increase in assets attributed to the online tools is an eye-popping $9.3 million (Click on chart to enlarge.)
Large majorities of advisors who credit LinkedIn for their gains in assets use the social network to accept and request connections, list their firm and display their skills. (Click on chart to enlarge.)
As seen in the above table, advisors who invest in paid promotion on Facebook are seeing average and median asset gains far above the group benchmarks. (Click on chart to enlarge.)