05.12.21

Advisors' Social Media Utilization Ramping Up, Evolving, Industry Surveys Find

by: Rich Blake

While there are a handful of financial advisors who generate viral responses to their TikTok and YouTube videos, most industry members just are not yet that savvy.

Very few are able to claim “influencer” status. Many professionals are still finding their way on social media and learning best practices for communicating with prospects—gaining some friendly trust, not being too heavy-handed.

Anecdotal evidence suggests preferences, proclivities, and successful approaches.

For example, connecting on LinkedIn remains hugely popular—and, we hear, effective. Instagram seems to be gaining a lot more traction.

Now, there is new research to quantify and underscore some noteworthy trends.

Putnam Surveys 252 Advisors

In June 2020, Putnam Investments conducted a survey of 252 advisors to explore changes in their use of social media in light of the pandemic.

Three-fourths of the advisors using social media for business indicated that they were able to initiate a relationship or onboard clients via an online platform.

More than half (55%) of advisors who initiated a new relationship say they have increased their use of social media and increased their prospecting activity.

One female bank advisor, described as a 15-year veteran, was highlighted in the Putnam research as an example of someone who made connections by naturally sharing her real experiences.

"I was able to add several new women clients just by connecting with them about my own struggles with my children being home full-time," the bank advisor said. "The demands of motherhood, and the balancing act between my career and being a mother, became a common bond we shared in conversations on social media."

An insurance advisor shared a strategy of sending out targeted LinkedIn InMails last month using a detailed search function.

"I was able to turn two of my 20 targets into new customers," the advisor said.

One bank advisor described as age 30 and having five years' tenure said: “LinkedIn has the functionality to connect with 2nd level and 3rd level contacts. That makes it possible to build and develop my network with more related prospects. And LinkedIn always recommends contacts, which saves me time and makes networking easier.”

Power of Video

Advisors need more than marketing savvy to adapt to changing times. They also require the support of their firms.

According to Putnam, nearly half (48%) of advisors received approval to utilize new social media platforms during the lockdown.

Some 40% received additional training to best utilize the new tools.

In the past, many banks worked slowly to adopt new communications tools; that was because of the administrative and compliance headaches associated with managing workflow, as well as on-boarding vendors and archiving content. But the sudden interruption of traditional marketing during the pandemic, and some recent clarify from regulators, is spurring much more rapid adoption. 

Video content shared on social media platforms is a great example of a fast-moving trend accelerated by the pandemic, said Stephen Boswell, president of marketing consulting firm Oechsli.

“We have seen a dramatic evolution over the past year as advisors have embraced video content for social media," Boswell said.

"Almost every firm either currently producing it, or somewhere in the process of rolling it out," he added.

With this change in compliance culture at the bank level came an expanding menu of new media platforms used to interact with prospects.

According to data from the Oechsli Institute, a research arm of the consultancy, this shift in advisor/client interaction, though born of necessity, was rapidly embraced by customers.

Of affluent clients surveyed by the Oecshsli, some 77% indicated that they saw the same value from a video conference as they do in a personal meeting in their advisor’s office.  

Younger clients are especially open to social media.

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, according to RIA Intel.

Positive Outlook

Advisors have demonstrated adaptability with 84% expecting that the changes made to their communication practices will largely remain going forward.

Still, while some believe they will return to operating as they did pre-pandemic, 9 out of 10 advisors agree that social media has changed the nature of client relationships during the pandemic.

Michael Alexander, president of Wealth Management at Broadridge, told RIA Intel that the majority of survey respondents (57%) said communications with their advisor had changed in some way in light of new stay-at-home mandates; 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,” he said. “These behaviors are broadening, deepening and changing the client-advisor relationship. As a result, investors don't want a return to the past,” Alexander said in the report. “They largely prefer this new normal."