Charlie Van Derven Charlie Van Derven.

You might quickly disagree, but prospecting for new clients on social media “isn’t about marketing or advertising. It’s about socializing and selling. It’s about starting new conversations with people you want to do business with.” That’s what Charlie Van Derven, founder-president of Social Advisors, argues in an interview with ThinkAdvisor.

Call him a wingman for FAs: He helps start online conversations with folks they don’t know but who would ideally fit their client niche. A 20-year veteran of the digital marketing world, Van Derven launched his own company in 2013. Clients include RIAs and FAs of independent BDs like Cetera Financial Group, Commonwealth Financial and LPL Financial, as well as individual wirehouse FAs who hire him to help with their social media engagement strategy.

Over the last five years, the financial services industry, in general, has increasingly embraced business use of the most popular social media: LinkedIn, Facebook and Twitter.

Indeed, a late 2018 study by Putnam Investments found that 98% of advisors were using it for personal and business purposes — 83% for business — and that 92% gained new clients as a result. LinkedIn was the most popular platform, the survey showed.

As for how to best put social media to use, simply posting content is not the route to expanding an advisor’s client base, Van Derven contends. Advisors also need a strategy to engage prospects and start conversations with them.

“If all an advisor has is a content strategy,” he says, “they’re only doing half the work. Content helps show their expertise, but content alone does not produce clients.”

Enter: LinkedIn Sales Navigator, a premium upgrade that Van Derven leverages to help FAs find and link up with ideal prospects. The sales tool can “slice and dice” LinkedIn data by 12-15 different criteria, says the coach, who has no business affiliation with LinkedIn.

In the interview, the marketing expert, who advocates for an integrated approach of traditional media and social media, discusses FAs’ biggest challenge when it comes to using the latter.

ThinkAdvisor recently interviewed Van Derven, on the phone from his office in Daytona Beach, Florida. He noted that, stemming from a conversation Social Advisors started for him on LinkedIn, one of the firm’s clients recently landed a $3 million account. “He invited me to a steakhouse for lunch,” Van Derven says. “I figured it must be good news.”

Here are highlights of our interview:

Why is it important for advisors to use social media for client acquisition?

Social media allows an advisor to decide exactly who they want to work with in their geographic area — and find those people en masse.

Is posting content the best way to acquire new clients?

There’s a big gap in advisors’ understanding of how to use social media. Though a good content strategy is a must, that alone does not produce clients. Posting content — like articles, videos and podcasts — isn’t a client-acquisition strategy and isn’t really leveraging social media. Content can help demonstrate expertise; but if all an advisor has is a content strategy, they’re only doing half the work.

What, then, is an effective client-acquisition strategy?

Advisors create new client opportunities by talking to the right people; so they also need a good engagement strategy to start conversations. Social media isn’t about marketing; it’s not even really about advertising. It’s about socializing and selling. It’s about starting new conversations with people you want to do business with. So if you’re not reaching out and asking people to talk business in some capacity, you’re not actually prospecting.

But FAs are required to follow regulations about using social media.

Certainly there are regulations, but the [industry’s] fear of social media isn’t there anymore. It’s not the scary environment it was even three years ago.

Are more younger advisors than veteran FAs using social media to acquire clients?

Not necessarily. In fact, Putnam Investments’ research says that advisors who manage [at least] $100 million in assets actually have a higher degree of success with it than younger advisors. We work with just as many 60-year-old advisors who are interested in continued growth as 30-year-old advisors.

What’s the biggest challenge for FAs employing social media for client acquisition?

Standing out from the crowd.

So what should they do to differentiate themselves?

Post their own original content. They need to speak to a specific audience. When I ask an advisor who is it that they want to build their business around, most of the time the unfortunate response I get is: “Anyone with money.” That’s saying, “I want to meet people, but I don’t know what their needs are.” One of the great ways to differentiate yourself is to choose a niche audience to speak to directly; for example, business owners or 401(k) plan sponsors.

How does an advisor find prospects for the niche in which they specialize?

The single best platform for financial advisors to be on now is LinkedIn Sales Navigator, which is an upgraded premium LinkedIn service. It allows you to define exactly who you want to talk to and implement strategies to start conversations. Eight or nine advisors out of 10 would tell me that the biggest hurdle to growing their business is having conversations with the right qualified people. Social media — and specifically, LinkedIn Sales Navigator — is designed to help advisors start conversations with the people they want to do business with.

Getting back to content, how helpful to adding new clients is content that firms pre-approve?

It makes it very easy for the advisor to schedule content delivery, wash their hands of it and be done. But what ends up happening is if one advisor posts some of that content library on a Tuesday and their competitor down the street posts the same content on Thursday, people are seeing the same content on different profiles. That has the potential to destroy advisors’ credibility.

Broadly, for the client base that works with you, how long does it take for a targeted prospect to become a client?

For our average client, it’s usually three or four months to acquire the first client. One third-year independent advisor from Orlando just landed an [approximate] $3 million client as a result of a conversation we helped him start on LinkedIn.

Have you been working with him long?

About a year and a half. We send him 10 or 12 people to talk to every month. He probably engages with 15-18 people before he lands a new client. He’s putting a client in place every six weeks or so — though not as big as $3 million — off the work we do on his behalf.

When is it appropriate for advisors to run advertising on social media?

Generally, if the compliance department of an advisor’s firm allows it, do it. Advertising on social media is very efficient and fairly inexpensive, depending on how you approach it. The beauty of it is that you get to define exactly who your ad gets in front of — the right set of eyeballs — because of all the data platforms like Facebook, LinkedIn and Twitter have.

Are there any other social media platforms that advisors would benefit from to expand their books but that they aren’t using?

A really great one for the industry to wrap their minds around would be Instagram. If an advisor is looking to do business with young professionals, it’s a major platform for them. RIAs can use Instagram now; but in the case of independent BDs [and wirehouses], I don’t think their social media policies allow for Instagram at this point.

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