The dos and don’ts of discussing market volatility on social media

By Doug Wilber

When people need financial advice nowadays, where do they turn? For better or worse, the answer increasingly is social media — which is exactly why financial advisors need to build a presence on social media platforms and become part of the conversation, especially during times of market volatility.

In our digital-first world, social media has rapidly become a central hub for discussing financial markets and financial investments, by experts and novices alike. Everyone who chimes in seems to have a strong opinion. Conversations and debates surrounding everything from deflationary pressures to rising interest rates can be quite spirited, to say the least.

This provides an exceptional opportunity for financial advisors to dive in and share their well-informed knowledge with people who value it. Given the fact that around 50% of investors say social media has a dramatic impact on who they hire as a financial professional, it is essential that you take advantage of this opportunity to share your knowledge and increase your following.

Keep in mind that when it comes to discussing market volatility online, you must remain mindful of the delicate information you share and how it could affect others in the market. To build trust and promote transparency, it is important that you share solid information and join in these discussions.

Become the voice of reason

Social media an excellent tool for building relationships, but many people turn to others on social media networks for financial advice. It's common for anxious people to seek guidance and reassurance in a time of economic uncertainties. However, social media is full of influencers who have zero credibility but are still racking up views and likes by sharing unfounded financial advice with others.

This is exactly why it’s such a great idea to join these conversations as a reputable player in the financial industry. More knowledgeable resources are in high demand. It's good business for your practice, too -- as of 2022, financial advisors could expect to convert 41% of social media leads to clients, an increase from 34% in 2019. Around 57% of advisors with a defined marketing strategy were able to successfully convert social media leads into new clients, compared to 36% of advisors without sound marketing strategies.

Many advisors see the potential in social media to build their personal brands, and social selling is a powerful strategy for creating trust. Financial conversations constantly happen online. You're either part of the discussion or you're leaving opportunity behind.

Discussing market volatility on social media

So you're ready to join the social conversation, but should you talk about market volatility? When financial advisors are transparent with their clients about market volatility and the potential risks and rewards associated with investing, it builds that much-needed trust and confidence. Advisors who avoid discussing market volatility or downplay its significance, on the other hand, may find that their clients lose faith in them and their ability to navigate the markets. The same logic applies on social media.

You can discuss market volatility effectively and nurture relationships with prospects and clients alike with a few dos and don'ts:

DO be a person, not a brand. Your digital reputation affects prospects' opinions. That's the reality now. As such, you must use digital platforms to build relationships online and demonstrate expertise, not just push out brand content from your bank or firm. Being you is how your online presence can lead to successful social selling.

DON'T be afraid to talk about market volatility. This is how you establish expertise. You must offer content that is valuable to others, especially during times of market turbulence. It's a good idea to remind your clients about the problems associated with making spontaneous investment decisions based on emotions during these periods of market disruption. A great way to boost engagement on your channels is to ask your followers questions and provide thoughtful answers.

DO show up on social media as you would in real life. Show your human side. Post about local involvement or connect followers and clients with community-involvement opportunities that you also support. Beyond that, be genuinely empathetic and caring. Avoid the distraction by short-term price fluctuations and stay focused on the clients' long-term goals. Sharing historical experience and knowledge about past market disruptions can be incredibly beneficial and reassuring. Continue to remind clients that market volatility is something that comes and goes; they'll appreciate your candor and expertise.

DON'T be promotional. Content should be authentic and provide value to followers, not your practice or your institution. Put the client at the center of your content and reinforce the importance of goals when investing. Use social media as an opportunity to educate clients and prospects about investing. Help them understand what market fluctuations mean and remind them about long-term implications.

DON'T forget compliance. The rules that govern financial institutions apply to what you post on social media, so make sure your understanding of any applicable rules and regulations is up to par. You must keep records of all social media posts and communications for three years, for example. Know the rules before you step on the field of play. But don't let compliance keep you on the social media sidelines. The right tools can make social media compliance a breeze.

Adapting to the current environment can be a bit intimidating to those who haven't leaned into social selling before, but it doesn't have to be. With the right tools and strategies in place, financial advisors can manage social media with confidence, creating content that resonates with their target audience and engaging followers in meaningful ways.

Doug Wilber is the CEO of Denim Social. He may be contacted at [email protected].