Going Social
Advisors Find Advantages of Social Media Appealing

Social media has surged in popularity in the past year. More than 43% of those who use the Internet now use social networking sites, such as Facebook, MySpace and LinkedIn, according to the Consumer Internet Barometer, a report produced by the Conference Board and TNS.¹ That’s an increase of 27% from a year ago. In fact, online networks are so popular that The Global Language Monitor named “Twitter” as the most used word in 2009.

The Promise of Social Networking Sites
Advisors are beginning to become more aware of the advantages of utilizing social networking sites to keep in touch with current clients and reach out to new clients. In a survey we conducted in December 2009, we found that advisors are most interested in learning how to harness social networking platforms for securing new clients (46%), enhancing communication with current clients (35%) and advertising or promoting their firms (30%).

Interest in Learning How to Harness Social Networking Platorms

While Facebook is the most popular social networking site and is considered by many to be a must-have Internet address book, the leading social networking site for advisors is LinkedIn. Seventy-eight percent of online households use Facebook, and 17% of households utilize LinkedIn. Among advisors, about half (42%) use LinkedIn, in large part because it is tailored for business use.

The Power of LinkedIn
LinkedIn—as well as other social networking sites—can be a powerful marketing and communications tool for advisors. “LinkedIn allowed us to expand our circle and connect with people. This social media web site not only offers a way to reach out to others but also allows us to initiate trust and develop relationships through meeting a person on a level he or she is most comfortable,” says Robert Fuest from Landor & Fuest.

Building a network is the most important part of Linked In. While the site provides new ways for advisors to connect with, inform and interact with customers, compliance issues are still being ironed out for these emerging technologies. Recently, FINRA instituted new regulatory changes and released guidelines for financial advisors who use social networking sites and blogs. As you consider utilizing social media, it’s important to become familiar with these evolving regulations. Link: http://www.finra.org/Industry/Regulation/Notices/2010/P120760

Awareness and Usage of Social Networking Platforms

Five Tips for Getting Started on LinkedIn
Using LinkedIn is still a learning process for some financial advisors. Here are some tips for advisors who would like a head start establishing their LinkedIn presence:

1. Complete your profile with as much detail as possible, including your credentials, background, affiliations and services. If possible, add a professional photo.
2. Preview prospective clients’ profiles–you can learn about their interests and activities, and have a more productive conversation when you meet them.
3. Join your colleagues–such as the RIA Marketplace™ group. For best results, actively participate in the group’s conversations.
4. Explore adding clients’ connections and searching for people with whom you have lost touch. By viewing the contacts of your contacts, you may be able to build referrals.
5. Make sure you have a unified marketing plan—and message—for all social networking platforms.

Regulations and Risks
There are many benefits to social networking, including a relatively low cost (especially in light of tight budgets) for communicating with current and prospective clients. By utilizing social network sites, advisors can get their messages out quickly, measure the effectiveness of their communications efforts and get feedback directly from clients.

However, there are some things to be aware of in order to most effectively use sites such as LinkedIn.

• Because these technologies are new, industry regulations regarding social networking sites will likely be in flux for a while. Before posting a profile on social media sites, you should get approval from your compliance department.

• If you use social networking for personal connections, be sure to separate your personal online presence from your professional presence.

• To get the most out of your efforts, you have to actively participate on LinkedIn and other social networking sites. If you’d like people to recommend your work, for instance, volunteer to recommend theirs first rather than simply hitting them up for a recommendation. Communication is a two-way street, and other users quickly dismiss those who only post for their own benefit.  

• If you use social networking for personal connections, be sure to separate your personal online presence from your professional one.

Social Networking is Here to Stay
While advisors are only just beginning to take advantage of social networking sites—about half (55%) of RIAs don’t spend any time on social media and about 40% spend less than one hour per day on social media–there are many reasons to consider gaining a presence on these sites. First and foremost: Your clients are online and they are using social media to communicate; if you aren't, your practice may be missing opportunities. While you don’t have to master every aspect of social media all at once, you're doing yourself (and your bottom line) a disservice if you don't at least make a foray into this new medium.  By going social, you’ll gain an edge on securing new clients, enhancing communication with current clients and advertising or promoting your firm. More than half (62%) of advisors agree that social networking is here to stay, saying that social media will have a lasting impact on the financial services industry. Since social networking use is still in an early stage within the industry, it’s the perfect time to establish a social networking presence that you can expand in years to come.

Time per Day Advisors Spend on Social Media

¹http://www.consumerinternetbarometer.us/press.cfm?press_id=3669