Unlocking Real Value Blog

Advisors – Are You Social Yet?

Compliance concerns aside, many advisors continue to take a wait and see attitude about utilizing social media in their businesses and client servicing efforts. While more advisors are taking the plunge than before, the financial services industry remains a laggard. I have been advocating the use of social media for a long time, because it’s more important than ever to give clients what they want, when they want it and delivered how they want it.

A number of studies recently released by some reputable organizations reinforces the case for social media:

1) Forrester Research released a study in July which showed a high correlation between the number of times affluent investors interact with financial advisors in social networks and the investors’ payments for advisors’ services. This correlation was almost twice as much as the relationship between the number of interactions in person or by telephone.

Now, correlation does not necessarily indicate causation, but the large margin here does indicate that social media does have a significant benefit. One reason is perhaps the fact that social media allows investors to leverage their time by communicating with multiple clients at one time, while the other media mentioned above can only be done with one client at a time.

2) Accenture recently surveyed 400 advisors:

  • 77% affirmed that social media helps them with retention
  • 74% agree that social media helps them increase AUM
  • 73% say that social media serves to increase client interaction
  • 40% indicate that they have gotten new clients through Facebook, 25% through LinkedIn and 21% through Twitter

3) Cogent research surveyed 4,000 investors with more than $100,000 in investible assets, and found that a growing number use social media to help keep informed about personal finance and help them make investment decisions. In fact, seven out of ten investors who use social media for investment research (24% of the total) have changed their relationship with their investment provider because of something that they have read on social media.

If you haven’t embraced social media yet, it’s time to start kicking the tires – or  you will be left behind.

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