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Written by: Ben Cooper
In the financial advisory space, implementing a social media strategy is no longer a choice.
Advisors can benefit from social media in many ways. But at the end of the day, a social media presence helps in two major fashions: it allows RIAs to better communicate with current clients and connect with potential new ones.
A recent study from Cogent Reports found that more than 76 percent of financial advisors currently use social media for these purposes.
“We know that use and reliance on social media has been increasing among advisors for years, but it was surprising even to us to learn that today there are over 228,000 advisors actively using social media for professional reasons,” said John Meunier, a managing director at Cogent Reports.
Social media campaigns among financial advisors have sprout legs in recent years and proven to be an effective means of acquiring new business. Eric Roberge, founder of fee-only practice Beyond Your Hammock, recently told CNBC he signed 21 clients in 17 months primarily by expanding his social media presence and writing a blog.
Financial advisors have increasingly become savvier to the business benefits of social media, and many have recognized that when paired with consistent media coverage, a social media strategy can help boost AUM and improve client relationships.
Social media platforms help advisors stay in touch with their industry. Following the Twitter accounts and Facebook pages of competing firms provides advisors with timely information on developments within the sector. Advisors on social media also have access to breaking news and a stage to interact with current and prospective clients. Reading comments on posts allows advisors to take the temperature of their target client demographic and identify opportunities to better serve investors.
Interaction is the cornerstone of a successful social media strategy, and creating interesting and sharable content is the best way to get the conversation rolling.
But merely posting promotional content is not enough to build an online presence. As Roberge told CNBC, “the key is to balance self-promotion, education and sharing other people’s stuff.” Voted number one on BrightScope’s list of top 100 “most social financial advisors” in the U.S., Ritholtz Wealth Management’s Josh Brown is a master of this balancing act.
Brown’s Twitter handle (@ReformedBroker ) seamlessly blasts promotional content, financial news and blog posts to its nearly 123,000 followers on a regular basis. Brown also peppers his content with images and videos to attract more attention. According to digital marketing company SME Digital, Tweets accompanied by videos and images garner 200 percent more user engagement than text-only posts.
A social media presence like Brown’s increases investor awareness of the firm. Prospective clients shopping around for a financial advisor are often searching online. Investors today are spoiled with the option of comparing firms side-by-side. A social media platform that helps represent the value and capabilities of the advisor and his/her firm improves an advisor’s chances of being noticed and picking up new business.
A robust social media strategy, paired with consistent placement in the news, also provides an RIA firm with a critical, and elusive, element to acquiring new business: perceived credibility. Winning the trust and respect of an investor is essential when attempting to onboard new clients. A social media platform provides advisory firms with an avenue to do this.
Finally, for any business on a tight marketing budget, social media is likely the cheapest way to build a brand. Managing various social media accounts takes time away from an advisor’s daily routine. But otherwise, using Facebook, Twitter, YouTube and LinkedIn is free.
Launching and maintaining a social media campaign can be a daunting task, especially with a set of SEC and FINRA regulations to follow. But the reality of the situation is that many of your competitors are already using social media to grow their business. Don’t fall behind. Start using this low-cost, and effective, channel to reach investors today.