Financial advisors who use social media in their businesses are gaining more and wealthier clients than they were even a year ago, according to a Putnam Investments survey released Thursday.
In addition, more advisors are adopting social media to help them obtain new clients and women advisors are leading the way, according to the Putnam Investments 2014 Social Advisor Study. The survey included 729 financial advisors who had at least two years experience.
Sixty-six percent of advisors using social media for business indicated that social media networks have helped them gain new clients, up from 49 percent in last year’s survey. Advisors acquiring clients through social media initiatives report booking a median of almost $2 million in new assets as a result, close to triple the level of last year’s respondents, says Putnam.
“We’re seeing a remarkably rapid and dynamic evolution of social media use as advisors test ways to make this work for their practices,” says Mark McKenna, head of Global Marketing, Putnam Investments. “A year ago, the focus was almost entirely on business content and professional networking. Increasingly, advisors are leveraging the more personal side of social media and getting results.”
Putnam also finds the social media platforms that advisors now choose to be striking. LinkedIn remains the number one site, used by 55 percent of advisors, but Facebook, Twitter and Google+ usage is also up year-over-year.
“This fragmenting of social media preferences occurs against a backdrop of more social media usage generally — the share of advisors using only one network for business is down from 33 percent to 25 percent, while the proportion using four or more networks for business has more than doubled from 11 percent to 25 percent,” the survey says.
Women advisors are using social media even more than men, according to Putnam. Eighty-two percent of women advisors report using social networks for business compared to 73 percent of men, and more women (67 percent) say that social media plays a significant role in their practice marketing efforts than men (52 percent). Women are also likelier than men to obtain new clients through social media (71 percent versus 64 percent).
“The emerging demographic patterns among advisors on social media are really surprising to us,” notes McKenna. “While the research has clearly indicated that social media use is concentrated among advisors under age 50, especially those under age 30, this is the first evidence we have seen that female advisors are more deeply engaged in social media practices than men.”
Putnam feels the number of advisors using social media for business may have hit a wall. Of those not using social media now, only 16 percent are absolutely certain or very certain they will start in the next three years and 21 percent more say they are somewhat likely to start using it. Advisors not using social media for business overwhelmingly cite broker-dealer compliance limitations as the main reason.