Advisors who embrace social media by paying for advanced tools and services are likely to manage far more in assets than advisors who stick to the free options, according to a new survey.
While usage of LinkedIn appears to have peaked among advisors, Facebook interaction is still growing as advisors blend parts of their personal and professional lives, the 2016 Putnam Social Advisor Survey of 1,018 advisors revealed.
The survey, conducted by Putnam Investments in conjunction with Brightwork Partners, found that of advisors who used LinkedIn’s advanced search features, 41 percent reported gaining assets compared with only 9 percent of advisors who did not.
Advanced search features to help advisors prospect for clients are offered by subscription.
“The paid version is much more valuable,” said Jayme Lacour, director of social marketing for Putnam. “Free is OK, but paid is even more interesting.”
LinkedIn offers premium memberships tailored to market segments from job seekers to recruiters to business professionals. The site's Sales Navigator tool, which can cost upward of $1,500 a year, generates a median asset gain of $4.3 million, the survey found.
Of advisors surveyed using LinkedIn as their primary network, 33 percent have invested in a premium version. Of those, 88 percent are using the Sales Navigator tool, the survey found.
The survey found that 71 percent of advisors who say they gained assets via social media are using the LinkedIn feature "accept connections." The median asset gain attributed to social media for advisors using this feature and gaining assets was $700,000.
Meanwhile, on Facebook, use of the paid promotion feature increases the assets of advisors gathered and is seeing faster growth among advisors than LinkedIn.
The survey found that 33 percent of advisors who say they gained assets are using the paid promotions feature, while 11 percent of advisors who did not gain assets via social media are using it.
The median asset gain using Facebook paid promotion was $3 million, more than three times the advisors who reported gaining assets from “liking” companies, brands or individuals.
Usage Up by 10 Percentage Points
The survey, released Oct. 13, found that 85 percent of financial advisors said they use social media as part of their day-to-day work, a year-over-year increase of 10 percent.
Social media offers a “critical conduit for advisors” in reaching the marketplace, said William T. Connolly, co-head of global distribution for Putnam Investments.
That may also explain why more advisors appear to be using Facebook compared with two years ago, the research found.
Advisors report using Facebook not only because people flock to the social network with 1.7 billion users, but because compliance departments have also become more familiar with the social networking behemoth, Lacour said.
Whereas LinkedIn, with more than 450 million members, is a “massively indexed database” for prospecting, Facebook is useful for advisors to maintain personal relationships.
“Facebook is a bit more personal than LinkedIn so if a client is inviting you into their world, I don’t market with Facebook but I’ll post through Facebook,” said financial advisor Danny J. O’Connell, in a 2015 interview.
Facebook’s usage for business among advisors climbed to 54 percent in 2016 from 36 percent in 2014. LinkedIn for business grew to 73 percent this year from 64 percent in 2014, the survey found.
As employers become more familiar with social media, and as regulators issue more specific guidance with regard to how companies and producers can promote themselves, employers appear more willing to commit company dollars to help their producers.
“At larger firms we are seeing budgeting for premium (service) for the larger firms, so it’s not coming out of financial advisor pockets,” Lacour said. “Firms are becoming pretty accommodating.”
Only 12 percent of survey respondents named Twitter as their primary social network, but advisors using Twitter as a second or third network notched higher asset gains than advisors who only use LinkedIn or Facebook, or both.
Many New Clients
In other findings, the survey found that:
* 80 percent of advisors using social media say it helped them gain new clients.
* The median asset gain through social media is $1.9 million, and the average gain $4.9 million.
* 56 percent of advisors report that social media has improved their efficiency a great deal.
* For advisors with $100 million or more in assets under management, 35 percent report that social media plays a very significant role in their marketing efforts and 82 percent have used social media to gain clients, with a median gain of $4.7 million and an average gain of $8.3 million.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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