At the end of the 2019 NAPA 401(k) Summit on Tuesday in Las Vegas, closing keynote speaker Joey Coleman, providing his take on how advisors can adapt to the changing client experience, told attendees they should research clients on social media to help build relationships in phone or face-to-face meetings.
“Your clients are on social media all day every day giving you everything you need to have a level of familiarity,” Coleman said. “The question is, are you going to do anything with it?”
Apparently, a lot of advisors are indeed taking advantage of this opportunity and it is making a difference, if you consider the findings of the latest Putnam Social Advisor Survey.
The recently released 2018 survey results found more than nine in 10 advisors (92%) who use social media for business say it has helped them gain new clients, up from 86% in the same poll in 2017 and way up from the initial survey in 2013, when only 49% said so.
From the periphery five years ago, social media has evolved into a critical tool for business development and client service for almost all advisors. Advisors today are seeing more and more success from their social media initiatives and are more confident in and enthusiastic about social media than ever before.
The survey shows that advisors’ comfort levels in using social media for basic practice management activities like prospecting and client communication is increasing year over year. And the number of advisors who consider social media to be an important part of how they go to market has risen every year since the annual survey’s initial iteration in 2013.
Survey respondents say social media has changed the nature of how they work with and help their clients (48% strongly agree, 43% somewhat agree). The speed at which prospects become clients has been greatly accelerated by social media. Communication—and opportunities—occur in real time, on the channels where clients are most present and comfortable. More than two-thirds (67%) say they have more frequent communication with clients as a result of social media (up from 59% in 2017) and nearly six in 10 (57%) say decision-making is faster and easier (up from 50%).
Investible assets of clients gained from social media activity are trending up, while the average new account size is holding steady. However, the median age of a new client gained through social media jumped to 40 from 35 last year as social media matures beyond its youthful origins and develops traction with older (and potentially higher asset) prospects. In the 12 months preceding the survey, the average asset gain was $1.4M ($0.5M median).
While the percentage of advisors not using social media for business continues to hover around 16%-17%, the number of advisors who use no social media for business or personal purposes is dwindling. Of advisors currently not using social media, the survey revealed a dramatic uptick in the number who said they were certain or likely to start using social media for business in the next three years.
What advisors are using
- LinkedIn: 72%
- Facebook: 62%
- Twitter: 52%
- YouTube: 41%
- Instagram: 38%
- Snapchat: 22%
Fluency in social media
Interestingly, a high percentage of advisors classified themselves as “social media experts.” While this level of confidence is encouraging, Putnam compared advisors’ fluency against its own benchmark to determine their level of expertise.
While 61% said they were an “expert,” only 15% actually were by Putnam’s benchmark. Another 35% said they “get by” while just 4% say they’re “just getting started.”
- Are you a social media expert? Take the Social Advisor quiz to find out
3 best social media practices for advisors
Based on the survey analysis, there are three best practices for advisors looking to leverage social media to grow their book of business:
- Take an active approach. Advisors who actively network, prospect, and communicate on social platforms are seeing measurable results. Of those who maintain passive presences, none reported gaining new assets in the survey.
- Commit time and resources. Nearly half (47%) of advisors told us they plan to add team members with dedicated social media responsibilities, and 80% of high achievers are paying for a premium level of service on a social network.
- Get training. Advisors who engage in online or in-person training are seeing greater gains than those who rely on hands-on learning or on family, friends, and colleagues.
- SEE ALSO: Complete Putnam Social Advisor Survey
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
