Advisors Are Using Social Media Wrong. This Investor Survey Explains How They Can Get It Right.

Facebook, Twitter, TikTok, and other platforms are not for prospecting.

(Illustration by RIA Intel)

(Illustration by RIA Intel)

Wealth managers are not known for their social media savviness. In their defense, it’s hard to thrive in the ever-changing online world, where teenagers rule internet culture and fast-food companies have perfected snark as a corporate weapon.

However, financial advisors shouldn’t give up on social media as a professional tool. A new survey shows they might just need to rethink the nature of its usefulness.

Prolifically tweeting about investing, producing a vanity podcast, or self-publishing a book can help build and define a wealth manager’s brand. But good email marketing is by far the primary source of traffic to advisor websites and, consequently, lead generation. A January report by Snappy Kraken, a digital marketing platform for advisors, showed an overwhelming 69% of the traffic generated by 14,299 advisor marketing campaigns came from emails, followed by social media ads (17%), and organic social media (16%).

So, if social media is not the most effective way to attract prospective clients, why should advisors share updates on Facebook or engage in #fintwit debates?

They probably shouldn’t. Instead, advisors might get more out of social media if they used it the same way they do personally: to connect with people and keep up on their lives. Existing clients, who desire tailored interactions with their advisors, are open to them doing that, too. Younger clients are especially open to social media enabling that individualized attention.

Broadridge, a brokerage and technology company, surveyed 1,000 investors in North America who have a financial advisor and found that “87% of Millennials are comfortable having an advisor follow them on social media to offer a more customized experience and are receptive to reading advisor communications on social media.”

Investors are increasingly willing to engage their wealth manager digitally and that shift has been accelerated by the Covid-19 pandemic, according to Michael Alexander, President of Wealth Management at Broadridge. The majority of survey respondents (57%) said communications with their advisor had changed in some way in light of new stay-at-home mandates, and 62% said they would “entirely or partially maintain their new methods after the pandemic ends.”

“Advisors and investors adapted their behaviors to comply with stay-at-home mandates and social distancing rules, which led to an increase in digital communications and video conferencing, more personalized emails, and more frequent phone calls. These behaviors are broadening, deepening and changing the client-advisor relationship. As a result, investors don’t want a return to the past. They largely prefer this new normal,” Alexander said in the report.

Digital interaction with clients is here to stay and social media can help advisors determine who they should be reaching out to and what about.

The pandemic is also a “once-in-a-lifetime opportunity” to deepen relationships with existing clients, according to Alexander. The Broadridge survey showed many advisors are not communicating with clients’ family members, including those who might someday inherit assets and become clients themselves. While 44% of survey respondents said they discovered their financial advisor through a personal referral, an equal percentage said their advisor has not communicated with their spouse, partner, children, grandchildren or heir.

“It doesn’t have to be more complicated than a video conference. This is a natural moment to engage, educate, and communicate with spouses, partners and children.”

If advisors aren’t going to do that, they could at least follow them on Instagram.

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