New Resource Details Social Media Opportunities, Potential Pitfalls

While some six in 10 advisers describe themselves as social media experts, only about 15% actually demonstrate social media mastery.

The use of social media for business purposes by financial advisers has matured rapidly during the last decade, says Jayme Lacour, Putnam’s social media director.

Citing the newly released Putnam Investments Social Advisor Study, Lacour says it is no longer a question of whether a financial professional uses social media, but rather how they make use of it. Nearly all U.S. financial advisers (98%) are using social media for business and/or personal use at this point, Lacour says, with 83% using it for business purposes.

Having worked in the social media leadership role at Putnam for about a decade, Lacour says the growth in social media usage by advisers has been explosive, especially in the last five years. As Lacour points out, advisers are feeling increasingly confident in their use of social media, with six in 10 now calling themselves social media experts. This is up dramatically from 46% last year, Lacour notes, and probably indicates some degree of over-confidence.

“We are certainly happy to see advisers feeling confident and eager to utilize social media,” Lacour says. “At the same time, we encourage advisers to be strategic in their approach and to take the necessary time to manage their social media presence effectively. When we have conducted reviews of advisers’ social media activities, it is more like 15% who are demonstrating highly skilled approaches.”

Navigating social media as a private individual can itself be a nuanced task, and so it is only natural that adding business interests into the mix generates even more complexity. Putnam, for its part, has published quite detailed social media operations guides to help advisers maximize their use of new communications platforms and emerging technologies—and to avoid making some common and potentially costly mistakes. More recently, the firm has also developed what Mark McKenna, head of global marketing, Putnam Investments, calls bite-sized strategies for improving social media usage immediately. These are available for all advisers to utilize via

According to the 2019 survey, among advisers not currently using social media for business, 28% are “absolutely certain” that they will start using it for business in the next three years, up from just 9% last year. McKenna and Lacour agree that this is perhaps one of the most important findings from the latest edition of the survey, showing that advisers have, for the most part, abandoned their reticence about using social media. Not only have social media platforms become a leading communications pathway for older and younger Americans alike, advisers are having success turning social media contacts into new business opportunities. According to the Putnam survey, the vast majority of advisers that have used social media for business purposes report having gained new clients and new assets for their efforts.

“Advisers report using their social media expertise to make initial contact with referrals from existing clients, to acquire new clients and to increase assets under management,” McKenna observes. “Almost half of advisers strongly agree that social media has changed the nature of their relationship with their clients, up from 39% last year.”

One notable survey finding in this area shows that more than two-thirds of advisers say they have more frequent communication overall with clients as a result of social media; yet 44% note that they connect with their clients less often by phone or in person than before. This means social media can help advisers create stronger relationships while also saving time and resources.

Lacour and McKenna suggest this finding reflects broader trends occurring in the U.S. society relating to digital-based relationships and the growing role of technology as a core component of client service. When it comes to digital communications, the survey shows seven in 10 advisers say it is easier to share information with their clients in this manner, while 57% say the connectivity inherent in social media platforms makes collaborative decisions faster and easier.

According to the survey, in terms of use for business purposes, LinkedIn continues to be the platform of choice for advisers, where they follow companies, comment on or share others’ updates, request recommendations and post to groups or pages. Advisers also are increasing their use of LinkedIn for business development by connecting with other financial professionals, enhancing current client relationships, cultivating prospective clients and expanding their professional knowledge.

“Each of the major social media networks is preferred for different reasons, with LinkedIn favored for improving referral networks, Facebook for enhancing current client relationships and Twitter for business development initiatives such as thought leadership,” McKenna says. “Additionally, advisers are increasing their use of YouTube, Instagram and Snapchat, often using them at rates approaching those of the more established social networks.”

Putnam’s research also provides a profile of advisers gaining the most assets from social media use, relative to their total assets under advisement. Of the small group of advisors whose assets have already increased through the addition of clients generated through social media by 10% or more of the total previous AUA, close to half are between the ages of 30 and 39. Furthermore, this group’s average assets under advisement gained through social media is three-times the average for all advisers in the study.

According to the survey, these social media maximizers are more likely to pay for enhanced services from LinkedIn, and they are more likely to have been trained on social media by a colleague from their firms or offices—or by a wholesaler or representative from an investment partner firm. A majority of this select group, according to Putnam, is working to integrate social media data directly into their customer relationship management (CRM) system.

McKenna, encouraging advisers to read the full 2019 survey report, highlights that the survey was conducted in collaboration with NMG Consulting. It included participation by 1,021 financial advisers across the United States who have advised clients for more than two years.