Twitter, LinkedIn, Facebook and even Whatsapp are not new. They have been around for years.
In fact, we will soon have a group of fully-formed adults who have known nothing but instant communication.
Having 24/7 access to information is now an expectation, not a luxury.
But the financial advisory sector has historically focused on older, wealthier clients – and this group, for the most part, has not been among the first to rush out and try/embrace social media.
As the industry works to attract younger clients, lacking a ‘cyber presence’ could become a big issue.
Usage is expected
David Cooper, director at United Advisers Group, told International Adviser: “There is no doubt that social media now plays an important role in our communications.
“Many years ago, we decided to invest in social media because it has become an expectation rather than an exception. How we approach it very much depends on the audience and how they like to use the various networks.
“The two main channels we have focused upon are LinkedIn and Facebook. They have both proved important for lead generation and building existing client relationships.
“We use the various targeting options within LinkedIn and Facebook to run ad campaigns to specific audiences, as well as using our financial planner profiles to help build awareness and share best practice.”
Challenges ahead
Adam Riddell, director at Jersey-based Crystal PR, told IA: “Up to now, social media in the wealth management space has been mainly about profile raising and, in some cases, about creating opportunities to spark up conversations with prospective clients.
“However, social media creates a number of issues for wealth advisers – for instance, there are strict rules and guidelines around promoting products and services, whilst clients in this space tend to be very conscious of engaging significantly on such public platforms.”
Last month, the Financial Conduct Authority temporarily banned the promotion of speculative mini-bonds, following the collapse of London Capital & Finance.
“That’s juxtaposed, though, with a growing tendency for clients to want to integrate their wealth and investment communications and management channels in one place online.
“That’s definitely the direction of travel,” Riddell added.
“So, in my eyes, social media should be seen in a wider online context – for sure, if done well and the platform and content is chosen wisely, then social media can be useful.
“But the challenge for wealth advisers and managers is to find a way to use social media as a space to create opportunities for conversations, and then turn that into more meaningful one-to-one engagement.”
Have purpose
Targeting one or more specific demographics with a key message would be a good place for advisers to start, according to Cooper Abbott, chairman and president of Carillon Tower Advisers
“The wider their net, the less likely they may be to get the type of engagement they want,” he told IA.
“If done properly, social media engagement only needs to take 15 minutes twice a week and should act as a supplement to traditional client communications, rather than a replacement.
“Social media presents an excellent opportunity in the financial industry when used as a content distribution tool. We’re seeing that a growing shift towards younger investment decision-makers creates a larger demand for more financial planning resources.
“Asset managers, as well as financial advisers, need to reach clients where they are most active in the marketplace, which is now increasingly on social media platforms.
“Finally, compliance sensitivity is an important component in social media use, as is the right context when advisers share topics with clients.
“Posts can share issues that might be useful for more detailed, in-person discussions.”
