Late to the game, new study shows the impact social media is now making in financial services

April 1, 2013
thumbs up composed of dollar signs

This post was written by Joe Anthony, President of Financial Services

Years ago, when we first began working in the financial services industry, our clients came to us to help them achieve visibility in their markets. They wanted media coverage that would showcase their firm, enhancing their perceived credibility and visibility.

Times have changed as the demands of our clients’ clients have changed. It’s now a game of credibility, visibility, and ACCESSIBILITY.

Last week, Accenture published a research report titled “How Tech-Savvy Advisors Can Regain Investor Trust” that highlighted the continued emergence of digital and social media as tools for building relationships between investment advisory firms and their clients. Much of the report’s data was interesting, but one particular section stood out to me:

“Social media utilization has also helped FAs (financial advisors) achieve their key professional goals. Among all FAs surveyed, 77% affirm that it helps with client retention, 74% agree that it helps them increase assets under management, and 73% say it has led to an overall increase in client interactions.”

As financial services firms continue to evaluate the role and relevance of social media and digital communications in their broader marketing and sales strategy, the data from the report confirms that advisors and their firms are seeing tangible benefits from social media. What the report doesn’t delve deeply into is the question of why it is working and how firms choose to introduce clients and referral sources to their digital presence.

APPROVED: Financial advisors have good
reason to start liking social media

In our role, we are asked by our clients to develop and implement strategies that will help them achieve their objectives. Investment management firms in particular are eager to connect how their marketing and PR activities are supporting the distribution of their funds and the flow of new client referrals, as well as spurring client support and staff retention. In most cases, those objectives require firms and their professionals to become more accessible and more visible, while enhancing their perceived credibility.

Want to get more investors interested in your mutual fund? Let them feel like they know the individuals behind the investment decisions. Want to stimulate more referrals for your advisory firm? Give key referral sources an easily accessible social presence they can use to introduce and sell you to their network. Want to get investors to trust you and your firm? Talk to them often and regularly through social media, and stay in front of them by communicating over social channels.

The financial services community is embracing the social tools that have helped other industries tap new markets and expand their customer engagement. For RIA firms looking to advance their social media presence, here are six recommendations to put to work today:

1. Think about your market first. The #1 rule of communications is know your audience. Before engaging in social media, first consider with whom you want to communicate. Individual investors? Referral sources? Baby boomers? Retirees? Business owners? Then, know what is important to them. Too many advisors spend too much time talking about what they know and not enough about what their audiences want to learn. Don’t get caught in that trap.

2. Choose channels that reflect your practice and your audience. Think Facebook is only for kids and families? Well according to a recent study by Spectrem Group, 47 percent of ultra high net worth investors are active on Facebook. On LinkedIn, it’s 32 percent. Use one, some, or all channels available as a way to spread your visibility, and extend your brand, credibility, and expertise.

3. Think of social media as business networking. Too many advisors lament that they simply don’t have time to communicate on social media. Nonsense. Social media is simply a way to connect, network, and engage your markets. That’s sales, pure and simple. The more you realize the business development power of social media, the easier it is to justify a long-term commitment to the practice.

4. Don’t just regurgitate, educate! I can read The New York Times myself, thank you. If you think social media is simply sharing articles from other publications, I can assure you others won’t read them or share them. Rather, think about how to make your commenting meaningful. Fidelity issued its retirement savings report, for instance, revealing that the average American only has $77,300 in 401(k) savings, which raised concern and consternation. Don’t just share such an article. Say something about it. For instance, “Does it surprise you that the average American only has $77,300 in retirement savings? It does to me. I guess I am fortunate to have met lots of people who have planned wisely over the years? What keeps us from investing in retirement and what can we do about it? Read this article and then give me your ideas.”

5. Make it personal. As Dale Carnegie said, “a person’s name is to that person the sweetest and most important sound in any language.” When responding to comments, use the commenter’s name, and always agree, even when you don’t agree. “Peter, thanks for the comment. I agree that tax policy makes it sometimes difficult to save for retirement, and I would add one additional comment: We can’t control the uncontrollable. We can however …” Get it?

6. Think shareable. The success of your firm’s effort to connect, communicate, and engage can be amplified by sharing content that will be shared by others. What gets shared? Humor gets shared. Thoughtful, non-inflammatory opinions get shared. Inspirational thoughts of the day get shared. Why not make it your habit to share good financial news of people you know? For instance, this one post sticks in my mind from an advisor client of ours, “Congratulations to Jill and Bill Harvey, who bought their dream vacation home thanks to smart planning over the years. May the weather be warm and the beers be cold as you enjoy yourself in Key West!”

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