What happens when an unstoppable force hits an immovable object? It sounds like the making of the next Avengers movie, but in reality it’s something many companies are facing today. Social media, content marketing and smartphones have revolutionized how we connect with each other. But that world is on a collision course with the financial advisory world, an industry where people’s ability to freely converse is limited by regulatory and company constraints.
Though there are legitimate reasons to curtail some business communications, the model needs an overhaul in financial services. As the world continues to rapidly evolve and adapt to these changes, so must the advisory industry.

As we grapple with how to incorporate these new platforms and capabilities into our business model, we can look to industries like retail and entertainment that have successfully made the shift. Granted, such companies are not as hampered by communications rules, but by incorporating a set of best practices, financial advisors can enjoy the benefits, too.



These are new and powerful ways of interacting, a way of connecting with customers and prospects in ways not possible a few years ago. But there is a cost for managing additional channels and platforms, and there’s a risk of social media faux pas. On the bright side, this kind of media puts a new focus on clients that will help you acquire and retain them.

Social media, content marketing and smartphones have converged at the same time clients are demanding more convenience (see Figure 1). It’s a trend that is irreversible, and companies must plan carefully how to respond. Like many new technologies, social media was well ahead of regulators, and leading financial services companies have been slow or hesitant to adopt it. Now that regulations have been developed and companies’ compliance teams have drawn up internal rules, we will end up with a “new normal.” But how will the technologies be embraced by an industry so accustomed to direct interaction?

Another reason social media is a challenge for advisors is that consumers want to use it for both personal and business purposes. The industry has been uncertain how to use it as a business tool. But social platforms are a trusted source of information and a growing influence on buying behavior, even for financial products (see Figure 2). Despite their initial strides in this area, advisors still need to use social media more effectively—it’s the connective tissue allowing them to correspond with clients across both traditional and new media. Generation Y is more connected and socially networked than any generation in our history, and as the country begins to experience a transfer of enormous wealth to a younger generation, younger clients will have a very different expectation about how to interact with a financial advisor than their parents do. More young clients will expect firms to have a social media presence.



Social media has reached a saturation point across almost all age demographics. Fifty-two percent of Twitter and Facebook users are over 35 and the 50-to-56 age bracket has sharply increased from 9% of users in 2008 to 20% in 2011. The use of social media among wealthy clients is also increasing: 70% of millionaires use social media; 46% used Facebook in 2011, nearly twice the 26% who used it in 2010.

Yet many wealth management firms have little or no social media presence or use it in very limited ways. Regulatory concerns clearly are top of mind, but without doing something about this communication gap, companies could lose their standing with clients and attract fewer prospects.

If these stats weren’t compelling enough, one only needs to look toward the future. “Digital natives,” younger consumers with a social media mind-set, will not want to visit bank branches, write checks or get snail mail, and they will be less likely to speak to a person. Moreover, they will listen to and be influenced by their social networks and trust their peers far more than companies. According to Nielsen, 92% of people trust recommendations from friends and family above all forms of advertising. Many advisors have told me about the apprehension they have when their clients’ wealth passes on to the next generation and they have little or no influence over them. But would a person who has lived in a digitally connected world want to revert to phone and paper?
This should be a wakeup call for those who are unknowingly disconnected from their clients.



Among the “Big Three” social media platforms, LinkedIn, Twitter and Facebook, LinkedIn is by far the most used and valued as a business tool by financial advisors. According to a LinkedIn Marketing Solutions and FTI Consulting report, 91% of financial advisors who use a social network for business use LinkedIn. That’s nearly three times as many as those using the next social network (see Figure 3). Among financial advisors, LinkedIn is used 83% for business and 17% for personal affairs; the business use numbers are inverted for Facebook and Twitter at 29% and 39%, respectively. The same study showed that, by a large margin, LinkedIn was the best platform to cultivate client prospects, make professional contacts, build a personal brand, improve referral networks, etc. Most important, LinkedIn proved to be a successful tool for gaining new clients: 32% of those acquired had more than $1 million in assets under management. But even though the site helps advisors connect with and acquire clients, overt sales tactics won’t work there. Instead, it’s a platform for sharing rich content and relevant articles that will drive people to connect to you.

According to social media monitoring firm Visible Technologies, Global Fortune 100 companies are jumping on the social media bandwagon because it’s where the action is—and where the customers are. According to a recent study by the firm, the Global Fortune 100 was mentioned more than 10 million times in a single month. The mentions of these companies on Twitter have skyrocketed—to an average of more than 55,970 mentions in a single month.
According to Twitter, daily tweets have increased 700% in the last two years from 50 million in March of 2010 to 340 million by May 2012. Twitter is an ideal way to disseminate information on a micro-blogging platform and bring followers back to a specific piece of content, whether it’s a video, a landing page or a blog. Advisors should view Twitter as a beacon to attract the attention of their online community and bring them, via a link embedded in the tweet, to specific content, tools and other useful information. That way they can build reputations as trusted sources of relevant information.

A Major Shift
Over the next three to five years, advisors should expect a major shift in the way they interact with clients and prospects. The industry has acknowledged the growing influence of social media and mobile usage and the growing importance of content. But there’s skepticism about the idea that digital touch points could be used to build relationships in an industry that has traditionally offered a high-touch, personal service.

Though companies have to navigate the regulatory and privacy hurdles they face both internally and externally, such regulations should not be a deterrent to adopting social media. But a firm’s adoption of social-mobile initiatives should not be managed in isolation. Many firms are making significant investments in social media monitoring so they can remain compliant while also giving clients real-time responses. There’s an important distinction between providing insight through social media (which conforms to Finra guidelines) and making recommendations. Companies that are proactive get high customer grades. Those that aren’t risk being perceived as not customer-friendly.

Figure 4 outlines recent social media stats and their implications for firms considering how to use social media as part of their strategy.
Every advisor should consider creating a personal social media playbook in order to build a personal brand in a connected world. Given that every client has a sphere of influence across his or her own social platform, consider the following guidelines for connecting with your audience:

Build Your Social Media Profile
• Ensure that your LinkedIn profile articulates and highlights your experience and expertise. The recommendations and endorsements add credibility, though they may be prohibited.
•  Create a Facebook profile that highlights your personal side and interests. Include content that will garner attention and encourage sharing among your Facebook friends.
• Use Twitter as a communication platform to connect with specific content, Web pages and other social media platforms.

Expand Your Circle Of Influence
• Facebook, LinkedIn and other social media platforms provide a window into clients’ personal events and milestones. That will allow you to offer them relevant, targeted content.
• LinkedIn and Facebook allow an advisor to scan a client’s network for potential prospects. But you should avoid overt selling tactics. Take a consultative approach that builds your reputation as an experienced thought leader.

Broadcast To People In Your
Network And Their Connections
• It’s important to publish useful, relevant information, research papers, etc. Sharing this information in LinkedIn groups, on Facebook and in e-mail will expand your reach.
• Twitter is a good way to broadcast to your network and lead people to a more detailed view of relevant information.
• You can take advantage of your firm’s own content, using articles, podcasts and white papers as part of a content distribution strategy to increase awareness and engagement with clients.
It is important to clearly define your goals when crafting your social media plan. Decide if you want to increase sales, create a stronger brand identity, position yourself as a thought leader or deepen the relationships with your clients. Follow these recommendations:
• Know your community and create compelling content for it. Ensure that the content is timely and relevant and that it can be shared across social networks.
• Focus efforts on conversation rather than selling products or services.
• Devise ways to harness user-generated content to attract a larger base of followers.
• Use social media to listen to customers as well and provide proactive customer service.
• Make some of your online tools, such as calculators, available for mobile devices and tablets.
• Advisors already on social media should be proactive and keep reacquainting themselves with internal policies and regulatory policies.

Jeffrey Fleischman is the CEO of Blue Panda Interactive.