Louis P. Stanasolovich, founder and CEO of Legend Financial Advisors, says he is not doing much with social media for the same reason. His firm has a presence on Twitter, Facebook, LinkedIn and a number of other sites, but for now, he is only using them to announce speaking engagements and radio appearances.
Meanwhile, Tim Maurer, a CFP with Financial Consulate Inc., has been posting videos on YouTube with great success, and he is using social media to promote his new book, The Financial Crossroads (www.thefinancialcrossroads.com/cms/).
Steve Wightman, a CFP with Wightman Financial, uses social media for both his personal and business pursuits, though he strives to keep them separate. (Because he's the principal of his own firm, he doesn't have to worry about privacy issues with his employer.) For personal use, he likes the online functions that allow him to update all of his friends with a single message. When he's doing business, social media allows him to network and share expertise with professional groups quickly and efficiently anywhere he goes.
Among those advisors I speak with who use or want to use social media, there are two main camps: those who want to network or generate interest in a specific product or event (such as a book or an appearance) and those who want to use it strictly as a client prospecting tool. The feedback so far indicates that those attempting the former are doing better than those hoping to do the latter. This is not surprising. In order to attract clients, your social media presence needs to be part of a well-designed, multifaceted marketing plan. Since the majority of advisors put little thought or planning into their marketing, it is unlikely that Twitter or LinkedIn will change things. Only those who plan and execute properly will succeed. But it is an open question at this point whether the considerable effort might be better spent elsewhere.
A few advisors say they like social networking simply because it gives people another way to find them online. For example, many people now use tools that allow them to search Twitter, LinkedIn and Facebook. If potential prospects can discover your profile on LinkedIn or see a video you've produced on YouTube, it might lead them to contact you or visit your Web site for more information. If you are careful about what you put in your profiles and mindful of regulatory no-no's, this could be a simple, low-cost, low-risk way of gradually entering the social networking arena.
Social media sites hold great promise, and the advances in software-not to mention hardware such as smart phones, tablet computing and auto computers-means these sites will be used more in the future. But we work in a highly regulated industry. In the wake of recent financial scandals, regulators are not going to look kindly upon those who, innocently or not, violate the rules. Our advice is to move slowly and cautiously, and to carefully vet any "social media experts" before following their advice.