Using social media properly is a great way for financial advisors to grow their businesses — although great care must be taken to ensure this is done compliantly, according to experts who spoke at the seventh annual Digital Marketing for Financial Services Summit in Toronto on Thursday.
One of the benefits of using social media is being able to track metrics such as the number of followers, connections or friends on Twitter, LinkedIn and Facebook, respectively, to determine if an advisor’s business network is growing, says Alley Adams, manager of wealth-management marketing with Canaccord Genuity Wealth Management.
In fact, to study the impact of social media on Canaccord advisors’ businesses, Adams looked at the “top net new asset flow” at the firm, regardless of book size. Over the past 12 months, 70% of the 20 advisors who had the most growth in assets under administration (AUA) were active daily on social media. In contrast, only 20% of the Canaccord advisors who had the lowest growth in AUA were active daily on social media.
“I just have a hard time believing there is no correlation between those numbers,” Adams said.
For advisors looking to become active on social media but fear the strict compliance rules around it, the key is ensuring that posts made on Twitter, LinkedIn or Facebook cannot be perceived as investment recommendations, said Paula Amy Hewitt, senior vice president and chief compliance officer with Macquarie Group Ltd., in another discussion at the conference. The same rule applies even when sharing third-party content, she added.
For many advisors, a common mistake in building an online network is using social media as a soapbox rather than as a tool for interaction, Hewitt said. For example, some older advisors, adopt an entrepreneurial mindset and don’t want to connect or converse with other advisors at their companies online for fear that it will push their client base elsewhere.
“If your relationship is so poor with your clients that they will jump to someone you’re linked with on LinkedIn, you have other problems,” she said. “It’s good for you to be linked to your colleagues. It’s good for you to like things that your colleagues like. It raises the profile of your company, it raises your profile, and it gets your name to come out much quickly on [online search] hits.”
For social media biography sections, it’s important for advisors to indicate the company for which they work, Hewitt added, which can be accomplished with the inclusion of a logo. Listing job titles and credentials, such as saying “investment advisor, CFA,” is also key, she pointed out. In addition, Hewitt noted that regulators, such as the Investment Industry Regulatory Organization of Canada, will also appreciate it if advisors specify which regional areas they serve on social media.
Personal details — such as “husband, father and “foodie” — will also help advisors connect with their audiences without provoking controversy, as would sharing political opinions, Hewitt said.
In terms of the content advisors post, they can still discuss hot topics, such as business mergers, either by tweeting they’re fond of the company or by sharing an innocuous company press release, she said.
But, whenever there is doubt as to what an advisor’s firm may permit on social media, Hewitt recommended that they should always ask compliance.
Photo copyright: cienpies/123RF