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Advisor Social Media Use Grows, as Do the Different Ways It’s Used

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There’s no question that financial advisors are increasingly using social media platforms to communicate with current clients and to prospect for more, but exactly how they engage and how often depends in large part on their individual firms.

Mark Kaschenbach, a financial advisor and vice president of investments at Wells Fargo Advisors, uses LinkedIn and Twitter at work, to communicate with current and prospective clients, as well as Facebook, on the side, communicating from is personal Facebook page, before and after work hours. “Twitter is how I communicate with the world, then LinkedIn. Facebook is for clients only.”

That’s not the case with Daniel Masiello, Jr. a chartered retirement planning counselor at Ameriprise Financial, who uses Facebook during working hours, in addition to other social media platform, to stay in touch with clients. “You can get in in touch, personalize relationships, wish clients happy birthday,” Masiello said.

He and Kaschenbach were panelists at Thursday’s SIFMA social media seminar about how advisors are leveraging social and digital tools to serve clients.

Also on their panel, Julia Fellerhoff, digital content specialist at Janney Montgomery Scott , which uses Hearsay Social, as a one-stop destination for advisors can communicate with clients across several social networks including Twitter, LinkedIn, Facebook and Google+.

In her monthly reviews of advisors’ online activity Fellerhoff found, however, that it’s not market commentary that does well with clients but the personal or human interest pieces such as one on how golfing with clients can lead to better business. “Personal content is the most rewarded.”

“Insert yourself into what people are interested in,” said Kaschenbach. “They’re not as interested in financial planning.”

Kaschenbach explained that he gets many more comments from clients about his Facebook posts with pictures of his four kids than about any communications that are industry-related.

Kaschenbach posts at least three times day on Twitter and LinkedIn and on Facebook during his train ride to and from work. At Wells Fargo his tweets have to pass through Socialware, a modular platform to mitigate risk, then the compliance department before they can be sent, but that only takes minutes.

Social media is so important to Kaschenbach that when he was looking to change firms – he was previously at Morgan Stanley – a firm’s social media platform was a major consideration.

Jamie Cox, CEO of Harris Financial Group, which is part of LPL’s network, can tweet without approval, although LPL has a post-review system but must submit blogs for review. “LPL distinguishes between static and dynamic content. Twitter is dynamic,” said Cox.

Social media platforms used by advisors run in two directions. Advisors can get their messages out to current and prospective clients and they can receive information about current and prospective clients that those individuals have posted.

Cox says he uses Twitter not as a message service but as a “search engine” to find information about people that he can then use to craft a marketing strategy or find information about current clients that he can act on.

“I saw posts from a client’s daughter on Twitter and found out my client was in the hospital. I contacted that person a day later. They were shocked I knew and could contact them.”

The increasing use of social media by advisors – over 80% use social media platforms, according to a 2015 Putnam Investment study – can pose risks for financial firms.

“More services are being run outside firms’ firewall,” said Steve Garrity, COO and founder of Hearsay Social, at the SIFMA seminar. “The safest approach is to block new digital communication channels. That works for a little while but won’t work in the long run … and advisors are also texting.”

With those risk in mind, FINRA, which issued some guidance for the industry about social media in 2010 and 2011, is currently working on new guidance about which business communications fall under supervisory rules and is also considering what kind of disclosure is needed about risks, said Thomas Pappas, vice president, FINRA Advertising Regulation. He called it a “work in progress,” which will have to go through SEC review.

Previous FINRA guidance on social media required firms to create written social media policies, provide training to associated persons, determine record keeping requirements and retain business communications made through a personal device. The guidance under consideration currently is “a work in progress that will have to go through SEC review,” said Pappas.

In August the SEC adopted new rules that will require advisory firms to list on Form ADV the social media platforms they use but not the social media accounts of employees. That rule takes effect in October 2017.

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