The conclusion is discussed in a new report from Aite Group, analyzing financial advisers’ use of and attitudes toward social media. The fourth in a series of reports based on a Q1 2011 Aite Group survey of 437 U.S. financial advisers, this report compares current adviser views of social media with findings from a December 2010 survey.
Evidence suggests that advisers are seeing limited or diminished returns from their use of social media. The most frequently cited benefit—reaching new prospects—was mentioned by 19% of social-media-using advisers surveyed in 2011, and that percentage is just more than half of what it was when Aite Group surveyed advisers in 2009. The percentage of advisers who have used social media to differentiate their practice from competitors’ practices declined from 21% in 2009 to 9% in 2011, and advisers who have seen an increase in revenue or fees from using social media declined from 16% in 2009 to 6% in 2011. While social media does possess beneficial applications for financial advisers, it must be used correctly and with realistic expectations, Aite concludes.
“The absence of benefits provided by social media may be muting advisers’ views of the potential impact of social media on business objectives,” says Ron Shevlin, senior analyst with Aite Group and co-author of the report. “It’s hard to criticize advisers for aggressively going after new clients, but many seem unwilling to admit that social media may be better suited to communicating with existing clients than to finding and acquiring new ones.”
The report profiles the following vendors, all of which provide tools and services to help wealth management firms effectively use social media: Actiance, eMoney Advisor, Financial Social Media, Social Volt, Socialware, SocMediaFin, SunGard, Thomson Reuters, and Wired Advisor.
The full report is available for clients of Aite Group’s Wealth Management services.