Social media is helping to reduce advisers’ amount of face-to-face time with clients and prospects previously required to manage their business, according to the fifth edition of the Putnam Investments’ Social Advisor Study.
“Advisers today are increasingly using social media as a tool not only to communicate with their clients and prospects, but also to deepen and evolve their ongoing relationships with clients,” said Mark McKenna, head of global marketing, Putnam Investments. “These professionals are also finding that leveraging both the business and personal sides of social media enables them to more easily connect with current clients and attract and develop new business.”
Putnam’s survey of 1,014 U.S. financial advisers found that 86 percent of those using social media for business reported it helped them gain clients, up from 80 percent in 2016, and the vast majority of those who gained (88 percent) report that their use of social media has changed the nature of their client relationships a “great deal” in a number of ways:
- Two-thirds (67 percent) of advisers find that it is easier to share information with clients
- Nearly six in 10 (59 percent) report having more frequent communication with clients overall, although 38 percent say they connect less frequently by phone or in person
- More than half (54 percent) of advisers say they have a better professional relationship with their clients, while 47 percent report a better personal relationship with their clients
- Half (50 percent) report decision making is faster and easier
According to the study, social media use is nearly universal among financial advisers, with fewer than 3 percent of advisers reporting no business or personal use of social media. Those advisers not using social media, on average, are 60 years old, have 24 years of industry experience and have only $69 million in assets under management. By comparison, advisers who use social media for their business have on average $89 million in assets under management and advisers who use social media only for personal reasons have on average $85 million in assets under management, suggesting that even a casual social media presence may result in additional business.
McKenna emphasized that the benchmark for successful use of social media as a business tool has clearly gone up in recent years. “It is imperative for advisers to employ a highly active, evolving strategy when it comes to utilizing social media in various aspects of their business. As a firm that is deeply committed to helping advisers grow their practices through dynamic, yet effective social media engagement, Putnam believes that there is a tremendous, ongoing opportunity for financial intermediaries to build and strengthen long-term relationships with clients through this critically important communications channel.”
LinkedIn is overwhelmingly the network of choice of advisers for their businesses, with 73 percent reporting they use LinkedIn, compared with 56 percent who use Facebook and 46 percent who report using Twitter for business. Use of other platforms for business is also growing: 42 percent of advisers indicate they use Yelp, 39 percent use YouTube and 34 percent use Instagram for business. Although LinkedIn continues to be the leading business site, advisers report they use Facebook with the greatest frequency for business — an average of 22 times per month, versus only 16 for LinkedIn.
Although social media use is widespread and 86 percent of advisers say that social media has helped them gain clients, advisers report a range of social media skill levels:
- Nearly half (46 percent) of advisers claim to be social media “experts”
- 41 percent say they “just get by”
- 5 percent are just getting started
- 2 percent would like to get started but need help