Most Advisers Marketing on Social Media Say They Have Won New Clients

Financial advisers almost universally report the use of social media has changed how they communicate with and win new clients; however, they disagree to some extent about the real impact social media use has on the quality of client relationships, and by extension, business performance. 

Putnam Investments has released the results of its fifth Social Advisor Study, compiling the responses of more than 1,000 U.S. financial advice professionals who engage with social media platforms as part of their branding and marketing efforts.

Offering a sneak peek of the survey results to PLANADVISER, Mark McKenna, head of global marketing, highlighted the fact that the vast majority (86%) of those advisers using social media for business report it has helped them gain clients, up from 80% in 2016. Beyond this, the clear majority of those who gained clients (88%) report that their use of social media has changed the nature of their client relationships a “great deal,” and in a number of ways.

As McKenna laid out, fully two-thirds (67%) of advisers today “find that it is easier to share information with clients thanks to social media.” Related to this, nearly six in 10 (59%) report having more frequent communication with clients overall, although 38% say they connect less frequently by phone or in person. Interestingly, the drop in phone and in-person conversations does not seem to be impacting the perceived quality of adviser-client relationships: More than half (54%) of advisers say they have a better professional relationship with their clients today than in the past, while 47% report a better personal relationship with their clients. Similarly, half (50%) report decision making is faster and easier thanks to social media connections.

McKenna emphasized that the benchmark for successful use of social media as a business tool has clearly gone up in recent years. As he phrased it, if advisers are using the same social media strategy this year as they did last year, they have already started to fall behind their more progressive peers. 

“It is imperative for advisers to employ a highly active, evolving strategy when it comes to utilizing social media in various aspects of their business,” he suggested. He also said Putnam believes that there is “a tremendous, ongoing opportunity for financial intermediaries to build and strengthen long-term relationships with clients through this critically important communications channel.”

Very few advisers (3%) claim they do not use social media platforms at all for business purposes, Putnam’s data shows. Those advisers not using social media, on average, are 60 years old, have 24 years of industry experience and have only $69 million in assets under management.

“By comparison, advisers who use social media for their business have on average $89 million in assets under management and advisers who use social media only for personal reasons have on average $85 million in assets under management, suggesting that even a casual social media presence may result in additional business,” McKenna observed. “Advisers using social media say they are spending somewhat less time on simply connecting and posting on the various platforms, but remain highly positive on a focused use of social media to attract and develop new business.”

Other findings show a solid majority (60%) of advisers who report having gained clients via social media say the communications channel has improved their efficiency “a great deal” compared with traditional networking, up from 56% in 2016, and more than eight in ten (83%) say that social media use has helped shorten the time required to convert a prospect into a client.

When it comes to the social media platform of choice for advisers, multiple platforms are commonly put into use for different functions. LinkedIn is overwhelmingly the network of choice of advisers for their business, with 73% reporting they use LinkedIn, compared with 56% who use Facebook and 46% who report using Twitter for business.

“Use of other platforms for business is also growing,” McKenna confirmed. “Forty-two percent of advisers indicate they use Yelp, 39% use YouTube and 34% use Instagram for business. Although LinkedIn continues to be the leading business site, advisers report they use Facebook with the greatest frequency for business—an average of 22 times per month, versus only 16 for LinkedIn.”

Interestingly, less than half (46%) of advisers claim to be social media “experts,” and 41% say they “just get by.”

As McKenna noted, the study yielded other notable findings, including the following: Advisers with $100 million or more in assets under management are more likely to have gained clients from social media use; one-third of advisers say social media plays a very significant role in their marketing efforts, up from 29% in 2016; nearly two-thirds of women advisers say that using social media has improved their efficiency a great deal; and advisers with three to 10 years tenure in the industry are the most likely to gain assets with social media use.”

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