Advisors Cozying Up To Clients On Social Media

Dallas-area financial advisor Danny O’Connell bypasses the shop-worn client conversation starters about the weather or the Cowboys. He doesn’t need them.

Instead, having followed clients on social media platforms, he launches straight into birthdays, vacation destinations and graduation ceremonies. That’s his privilege.

“Clients have moved into the ‘friend zone,’ “ said O’Connell, who communicates via LinkedIn, Facebook, Twitter and Instagram.

Growth of social media channels beyond LinkedIn is deepening advisor client relationships, said Mark McKenna, head of global marketing with Putnam Investments, which this week released the fifth edition of the Putnam Social Advisor Study.

Advisors now say, “I know you know these other people and are you interested in skiing or have me speak at your conference,” McKenna said. “They are making a very specific ask and that gets back to deepening.”

A decade ago advisors used LinkedIn for business and Facebook for personal use and to communicate with friends.

Now more advisors use Instagram, Pinterest, Tumblr, Snapchat and Yelp for personal use, but advisors report using them for business also, the survey of 1,014 advisors found.

As many as 88 percent of advisors say social media has changed their relationship with clients.

“That's what we are seeing – the shifts below the surface is really the story,” McKenna said.

“Social Nevers”

Not all advisors swear by social media and fewer than 3 percent of advisors report no business or personal use of such channels, the survey found.

Advisors who do not use social media are on average 60 years old with 24 years of industry experience, the survey found.

“I have a handful of clients who don’t even use email,” said Clifford P. Ryan, president of Elder Planning Advisors of Maine.

After a cost-benefit analysis, Elder Planning settled on only a LinkedIn page after Ryan found that many clients didn’t care for social media.

“In some ways I wonder if I’m just missing the boat or whether the industry is just making too much of a big deal out of it,” said Ryan.

For converts, social media is indeed a bigger deal.

Advisors who use social media for business have, on average, $89 million in assets under management compared with $69 million in AUM for advisors who don’t use social media, the survey found.

When O’Connell, founder of Next Level Insurance Agency in Addison, Texas, launched his agency nearly two years ago, he made sure it had a Facebook page first before a website.

Even without a website, his agency still boasts a closing ratio of 70 percent, he said.

A Maturing Medium

Heavy social media users like Ted Jenkin, CEO and co-founder of oXYGen Financial, say they’ve closed business on social media channels.

Other advisors like Marguerita M. Cheng prefer to limit the scope of their activities.

Like many advisors, her favorites are LinkedIn and Twitter, on which she relies to send clients birthday notes, or job change congratulations.

But she’s mindful not to be pushy or too sales-oriented.

That would be going too far and “that’s not who I am,” says the owner of Blue Ocean Global Wealth in Potomac, Md.

“Social media is a way of connecting and sharing,” said Cheng, who has used social media for the past several years, blogs for Kiplinger’s and Investopedia and willingly shares her thoughts about the market’s highs and lows.

“Clients and prospects respect that I’m not pushy,” she said.

Other Survey Findings

Among advisors who expect social media will play a significant role in their marketing efforts in the coming year:

• 54 percent are going deeper with their existing social network presence.
• 48 percent are integrating social media data into marketing automation systems.
• 47 percent are adding resources to their teams with dedicated social media responsibilities.
• 37 percent are paying for premium membership.
• 36 percent are integrating social media data into CRM system.
• 35 percent are using paid promotion.
• 32 percent adding another network to the social media mix.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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