How financial planners can make social media work for them

Social media has been heralded as the next big thing for some time now, but to make it work in their industry planners need to approach the medium differently, writes Andrew Tsanadis.

In the past couple of years financial advisers and wealth professionals have taken to social media and new technology in droves thanks largely to increased internet speeds and the expansion of mobile technology. 

Although some advisers have used the opportunity to build their brand and form stronger client relationships, there are still avenues of potential in networking online. 

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Most crucial to success in the online world is having a clear strategy and the capability to monitor and maintain an active online presence. 

Beyond attracting new business and building a referral network, perhaps social media’s greatest strength is its potential to build more confidence and trust in the financial services industry as a whole. 

How to get the most out of social 

Although banks and institutionally-owned financial service providers tend to have the revenue to install dedicated social media teams, they struggle to communicate effectively in the area of financial planning. 

“It’s very hard to work out if they’re targeting the end user or if they’re trying to get the end user to talk to an adviser,” The Humble Investor director Colin Williams said.

“I’ve noticed a lot of them are sending out these broad messages as opposed to more specific messages on the financial planning side.” 

Social media lends itself to conversation and it is because of this that independent advisers have a huge advantage over institutions.  

Active in her own tightly-managed online presence, Aspire Retire Financial Services chief executive Olivia Maragna said that compliance tended to hold a lot of people back in getting the most out of social media. 

“The independents do have that little bit extra flexibility and freedom,” she said. 

“The bigger the corporation, the more restrictions they have around what hey can and can’t do.” 

The Social Adviser founder Baz Gardner agreed, adding that the ability to utilise new technology as a relationship management and trust generation tool is hampered when one has to do so on behalf of an organisation. 

Despite the independent advantage, all advisers still need to remember the strengths and weaknesses of the major online platforms. 

Williams and Gardner said Facebook is a great tool that allows advisers to reveal to clients more about who they are outside of work. 

Twitter, on the other hand, is very much the latest news channel because it can be used to keep clients informed on the latest developments in the financial environment. 

“Ultimately what you’re offering is a relationship and that relationship will only work if the client trusts you,” Williams said. 

According to Gardner, the fear factor from advisers about sharing personal information with clients through social networking revolves more around an apprehension on the part of the wealth professional rather than the client. 

A recent FTI Consulting study of 400 financial professionals found that while 69 per cent of advisers were using Facebook to enhance current client relationships, 81 per cent were using LinkedIn as their primary network. 

The majority of LinkedIn users (66 per cent) used the site to prospect new relationships. 

i-Impact president Claudio Pannunzio said attracting new clients required having more than a mere presence or amassing sheer numbers. 

“If followers do not find value and are not engaged by what advisers say, the odds that they will convert into clients or generate high-value leads for you will be nominal at best.” 

Maragna said her business gets a lot of referrals through social networking but having a clear strategy is crucial to success.

“I think a lot of people with social media think, ‘well, I’ll just start it and get all this extra business from it’,” she said. 

“It’s like anything – it’s a relationship, I think that’s what people don’t get about social media as such.” 

Having followed a strategy, the next step is to keep track of what social networking platforms are working well in converting new business, she said. 

“We keep a track of every single call that we get through the office and where it comes from,” she said. 

“Even if someone says that they heard about us off the internet, we delve a little bit more into that until they say, ‘oh, I actually saw a tweet’.” 

Managing an online presence 

Experts agree that using social networking is only one part of the communication puzzle.

Managing your output is just as vital and something that many advisers struggle with in the absence of a robust client relationship management (CRM) system. 

Williams said a good CRM can allow an adviser to target information to various demographics across their existing and potential customer base, one of the cornerstones of an effective social media strategy. 

Advisers can be alerted in real time as to what clients are discussing or whether they’re trying to reach out. A status update could mean a life event, a cue for advisers to make their service and offering known, he added. 

Gardner said most advisers he consults with are managing their online presence ad hoc, but that’s largely due to CRM technology playing catch-up at the moment. 

Apart from a good CRM, more and more financial services providers are creating their own apps because it allows them to have far more control over the conversation. 

Pannunzio said the opportunity for a financial professional to position themselves as a rich source of knowledge to so-called Generation D clients shouldn’t be passed up. 

These clients tend to have a pronounced lack of trust in the financial system due to the effects of the global financial crisis, he said. 

By bolstering investor education for this segment, Pannunzio said it would allow advisers to build credibility and gain trust going forward. 

Although the engagement process is important to Maragna, the capabilities that social media bring in educating a mass audience help to improve the financial literacy of her clients. 

Gardner added that social media has the ability to change the perception of the financial advice industry as a whole because it allows advisers to communicate the message of what good advice does.

“The best way to do that is to tell stories and communicate the end outcome of how we change people’s lives,” he said. 

Lights, camera, action 

More traditional technologies like video recording have been given a new life thanks to video sharing websites, in particular YouTube. 

According to Williams, an adviser who creates a tailored video that showcases their skills in wealth management and investment can make the initial interview with a prospective client a lot smoother. 

It also allows a potential client to get more comfortable with their adviser by providing them with a physical representation of who they might want to handle their finances. 

Rather than going for the blockbuster trimmings, Williams said it is much more important to be ‘current’ when it comes to video blogging – for example, posting to coincide with government announcements or specific market changes. 

The cost-effectiveness of producing videos in today’s new technology environment is an opportunity that advisers need to embrace, particularly in an effort to stay in regular contact with clients during challenging marketing conditions, Williams said. 

Mobile is king 

The rapid growth and expansion of mobile technology has driven the uptake of social media by financial advisers, as June research from Zurich Financial found. 

According to the phone survey of 200 advisers – conducted by Beaton Research and Consulting – there was a 123 per cent uptake in the use of Twitter since December 2011 and a 74 per cent growth in the use of LinkedIn. 

Other figures showed a 56 per cent growth in the use of YouTube and 36 per cent growth in Facebook usage compared to the six months prior. 

In the past, the ability to properly manage a social media profile was hampered by the time-consuming nature of monitoring and creating content. Mobile and tablet technology has largely eliminated these barriers to entry. 

In addition, the rollout of the National Broadband Network will see a significant increase in current internet speeds, which will in turn further push the adoption of mobile technology. 

According to the Australian Bureau of Statistics’ latest internet activity report, the volume of data downloaded via mobile phones for the three months ended 30 June was 19,636 terabytes, a huge 43 per cent increase from the three months ended December 31, 2012. 

As at 30 June, there were 19.6 million subscribers with internet access via a mobile handset in Australia, an increase of 13 per cent from 17.4 million subscribers at December last year. 

Williams said he is receiving many calls from advisers to help update their website portals and in many ways this is being driven by the rise of mobile technology. 

Recently, Facebook found that around 50 per cent of their hits come from mobile devices, while this figure jumps to around 75 per cent for Twitter. 

“Mobile is creating a lot of issues and opportunities – and websites need to be what they call a ‘responsive’ website that allows users to navigate easily from the landing page,” Williams said. 

Companies with much larger websites such as institutions and banks will often direct users to a specific mobile website if they’re accessing the home page from a mobile device. 

More and more larger financial service providers are encouraging people to use their mobile or tablet app – a new channel of media that requires a clear content management strategy. 

“Advisers think that clients are interested in what they’re interested in – apps can be tricky in this sense,” Gardner said. 

“If you don’t have a clear understanding of what your audience wants, then the app is not going to do much.” 

He said the true power of apps comes from push-notice notifications, which provides clients with personalised updates from the advisory business and new philosophies about wealth management and investing. 

For Williams, the biggest challenge financial planners face in terms of mobile technology is the big push with social media. 

“Existing and potential clients want someone to talk to and if you’re not communicating with them online, someone else will,” he said.




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