Social media has quickly become an indispensable way for financial advisors to reach new and existing clients in real-time. In fact, Putnam Investments’ 2015 Social Advisor Study found that more than 80% of advisors use social media in their businesses. The share of advisors acquiring new clients through social media soared from 66% to 79% year over year, with the average annual asset gain from these clients reaching $4.6 million—that’s no small amount.
LinkedIn continues to be the most popular social media channel for financial advisors, but Facebook, Twitter, and other venues are gaining in popularity. In addition, advisors are getting a lot of news and information through social media channels, which makes such sites an important tool for keeping up with the latest trends.
Read on for tips on how financial advisors can properly use social media, avoid some common pitfalls, and turn it into a powerful lead generation tool.
Mix it Up
The vast majority of social media amateurs focus on the wrong type of content that provides very little return on investment. Rather than simply posting a couple links, social media experts suggest a well-rounded strategy designed to truly educate followers.
The 60-30-10 rule was created as a way to easily breakdown social media messages into three distinct categories. The strategy recommends listening and sharing relevant content from a third party 60% of the time, engaging and sharing content that you create 30% of the time, and promoting your own products and services 10% of the time. That way, you’re not overwhelming your audience with marketing messages, but you’re still generating a healthy number of leads.
In addition, it’s important to mix in pictures, news articles, pins, and humor to create a more compelling experience for followers as opposed to simply posting text all the time. Hashtags—smooshed labels that makes it easier for users to find specific-themed content—are also a great way to reach new audiences and increase engagement, especially when they’re targeted at relevant discussion topics. But again, it’s important to not overdo it; you should limit hash tags to one or two per posting to avoid the appearance of spam.
Exploit the ‘Social’ in Social Media
Most social media amateurs treat Twitter, Facebook, LinkedIn and other networks as a podium from which to broadcast their messages to the masses. In reality, these platforms are designed to be highly effective two-way communication channels.
Financial advisors should actively engage in discussions rather than simply posting links or sharing content. Instead of logging in just once a day, this means coming back to conversations multiple times per day and participating in discussions just like you would in person. Hashtags (denoted by the # sign) are a great way to find and participate in conversations by topic, while personal replies (which use the @ sign) are a great way to get others involved.
Of course, it’s important for advisors to adhere to regulatory guidelines governing their social media communications. The general rule is to take all client conversations offline when they involve investment advice or specific account details. In addition, advisors are generally required to log all of their social media communications and avoid making any solicitations for testimonials or other potentially-banned forms of communication.
The Bottom Line
Social media marketing can be intimidating to those just starting out, but with the intensifying competition among financial advisors, it’s becoming increasingly important. More than 80% of financial advisors actively use social media to build a client base, which means that those ignoring the technology could be missing out.