Advisors find a safe way to use social media
Social media — love it or hate it? It turns out that financial advisors, brokers and registered investment advisors are loving social media more in 2014 than they did five years ago. According to American Century Investments, 66 percent ranked social media’s overall value to their business as “high” or “medium” this year, up 36 percent from 2010.
That’s impressive but — we’re talking LinkedIn here, and Twitter, Facebook and YouTube. With the exception of LinkedIn, these are the media commonly thought to be the darling of the “kids” but not of the sober-minded financial folk. So, what’s up?
Equally confounding is that this favorable turn of mind has arrived, even though regulatory or compliance issues remain the advisors’ number one concern where social media is concerned. In 2014, 36 percent of the advisors listed this as their top concern.
Interestingly, this regulatory/compliance concern is down from 47 percent in 2010. This suggests the tides of worry may be changing.
But how can they be changing? It’s not as if advisors have forgotten all about the concerns they’ve harbored about being zapped for some social media violation. And it’s not as if the regulators have suddenly turned a blind eye to the concerns they have had about prudent advisor use of such media.
So, do the advisors know something the rest of us don’t?
What seems to be happening is that advisors have found areas where use of social media presents relatively little or no potential for a regulator to come knocking on the door with a writ in hand. These are what I would call business information areas.
Examples include: reading expert commentary and insights, researching prospects and current clients, and monitoring industry and market news. As it turns out, these very same areas are the ones that advisors ranked as the top three business uses of social media in the 2014 and 2010 American Century surveys. Coming in at a distant fourth place was another business information use: sharing news/content relevant to clients.
And get this: An even higher percentage of advisors “voted” for those for top four uses in 2014 than in 2010.
It’s as if the fog on the social media window has started to clear, and advisors are seeing exactly how they can make social media an effective — and safe — business tool. Reading, researching, monitoring, sharing news — all are business activities that many if not all advisors already do, so it’s easy to transfer that to the social venue and do it all faster and perhaps cheaper.
How about other business uses, such as posting commentary, maintaining a blog, or using social media for customer feedback and engagement? Only a few advisors checked those off, and it’s easy to see why: risk and time constraints. For example, if the advisor has the time to develop commentary for posts, the advisor would either need to run the posting by the compliance expert or else post and fervently hope the comments don’t run afoul of some reg somewhere.
The survey group did include advisors at insurance broker/dealers among those at other financial outlets. However, it did not include producers and advisors who sell only fixed insurance products. Probably the results would be similar, but it sure would be nice to know if there are key differences.
For now, the financial advisors have laid out a social media path for themselves, and they’re running on it. It remains to be seen whether and how they might beef up the business use of social to create a direct line to sales.