Advisors may want to pay close attention to the problems confronting Facebook because they are increasingly using the social media platform for their business.
According to the latest edition of Putnam Investments’ Social Advisor Survey, Facebook is the platform advisors use most frequently — averaging 22 visits per month compared with 16 for LinkedIn.
Both platforms dominate advisors’ use of social media. LinkedIn is used primarily as a referral tool and Facebook used to communicate with clients.
“LinkedIn is table stakes,” says Mark McKenna, head of global marketing at Putnam, referring to the minimum bet required to play a hand of poker. “But if you want to move beyond a professional business relationship you need to move into other channels.”
That includes Facebook, the primary social medium for most investors, as well as Pinterest, Twitter, Instagram, YouTube and Yelp, says McKenna.
According to the latest Social Advisor Survey, more than 97% of the 1,014 advisors polled — each with at least two years industry experience — use social media and 88% say it has changed their relationships with clients, making it easier to share information and to stay in touch more frequently.
Most important, 86% of advisors who use social media for business report gaining business as a result — adding an average $5 million — and triple that number for the most frequent users, according to McKenna.
“Advisors who are using social media in an active way are gaining assets; those who are passive [about social media] are missing out on opportunities,” says McKenna. “Yelp and Pinterest are probably in the upper echelons of folks gaining the most clients and most money.”
McKenna says it’s “hard to assess the Facebook situation,” but the survey notes that starting in January, Facebook ”initiated changes to its proprietary algorithm” that gives priorities to status updates from friends, family and groups over content from brands and businesses.
Facebook’s CEO, Mark Zuckerberg, has said the change to news feeds was made because news articles and marketing were “crowding out the personal moments that lead us to connect more with each other,” but they are also seen as Facebook’s response to the fake news stories it carried in the run-up to the 2016 U.S. presidential election.
The Putnam survey concludes with a Social Advisor Maturity Curve that provides a framework for advisors as they develop their social media presence. It includes four profiles including the social media “expert” whose goal is to attract net new assets and households. Unlike the “beginner,” “intermediate” and “professional,” the expert uses additional social media apps such as LinkedIn Sales Navigator and InMail, which are not free, as well as Snapchat and Instagram, along with Twitter and Facebook.
— Check out 22 Ways to Make the Right Reputation on ThinkAdvisor.