In Practice April 21, 2017

Benefits and Limits of Social Media Marketing

Advisers widely like to use social media to cultivate client relationships—but they see limits on the value of social media interactions, with the vast majority passing on premium social media marketing services. 
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Nearly half of advisers (46%) have successfully turned a social media contact into a real customer, according to American Century Investments’ Seventh Annual Financial Professionals Social Media Adoption Study.

Most of the new deals reached were small, with 23% of all advisers saying they posted a deal via social media pathways valued at less than $1 million. Just 4% report winning a deal valued at more than $5 million for the business through social media connections.

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A majority of advisers (55%) feel that being connected with an individual or company on a social media network increases the chance of doing business with that entity in the foreseeable future. Forty-three percent feel there is little impact, and just 2% suggest pre-existing social media connections make establishing a business relationship more difficult.

As advisers might expect, the research shows Facebook is more popular for personal use, while LinkedIn is more popular for business-related use. Interestingly, slightly more advisers (24%) report using Facebook for both personal and business purposes, compared with 21% who use LinkedIn that way.

Advisers cite a laundry list of benefits seen from embracing social media for business purposes, although generally only about one-quarter of advisers cites each of these: “Increased my visibility in the marketplace; enhanced my profile with clients; enhanced my business knowledge; improved my referrals or opened a door that otherwise had been closed; shared insights with clients and prospects; attracted new clients; and retained clients more easily.”

Firms cite ancillary benefits from social media engagement in the form of gaining better access to expert commentary/insights, viewing more news/content relevant to clients, and getting to know prospects in a more personal way. Important to note, however, 23% of firms say they are not seeing any positive business changes attributable to using social media.

The American Century Investments research goes on to suggest relatively few advisers feel compelled to invest in paid marketing services offered by Facebook, LinkedIn and other sources. A whopping 75% of advisers do not use such services, and another 5% are unsure to what extent their firm is paying for social media marketing.

An infographic summarizing key findings is available for download here. 

Client Service April 20, 2017

‘Unnerved’ Investors Seek Confidence In Advice

News headlines surrounding the recent U.S. elections and the future of the Affordable Care Act have left many investors unnerved, says Jim Jessee, with MFS.
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The 2017 MFS Heritage Planning Survey shows two-thirds of investors have identified rising healthcare costs as one of their top concerns over the next three years.

And there are other widespread causes of anxiety, according to MFS. Approximately half of the investors surveyed identified the U.S. federal deficit, Social Security benefits and volatility in the stock market among their top concerns.

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Older investors are particularly concerned about rising healthcare costs, with more than three-quarters indicating they are either “very” or “extremely concerned” about this topic. Millennials and Generation X investors are “more focused on saving enough for retirement, with more than two-thirds of respondents in both groups indicating a high level of concern.”

Jim Jessee, co-head of global distribution with MFS, observes that six in 10 investors have delayed or will delay a major life event due to their current financial situation.

“Clearly, the barrage of headlines surrounding the recent U.S. elections and the Affordable Care Act has left many investors unnerved,” Jessee says. “And although these are real concerns, they aren’t insurmountable. Financial advisers can add a lot of value by talking to their clients about the things that keep them up at night and helping them get their financial houses in order.”

The research suggests Generation X is especially well suited for one-on-one financial advice.

“Generation X investors are relatively pessimistic about their financial future,” MFS reports. “Just one-third of Generation X investors are confident in their ability to address financial concerns and meet their long-term financial goals—the lowest among all generations surveyed.”

MFS Director of Business Development Doug Orton, observes this group simply hasn’t saved enough to feel confident, “and unlike many of their parents, they don’t have pensions or defined benefit plans to fall back on.”

“They are desperately looking for guidance,” he adds. “In fact, 85% of Generation X investors surveyed said they look to their financial adviser for retirement savings advice and approximately 60% say they will rely on their adviser more in the coming years.”

Like Generation X, MFS finds Millennials are “also pushing out significant family and career milestones,” due in large part to financial uncertainty. Still, Millennials are fairly optimistic about the future. Seven in 10 believe their financial situation will improve over the next three years and roughly half of those surveyed are confident in their ability to meet their long-term financial goals.

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