Why Financial Advisors Are Using Social Media

LinkedIn, Facebook, compliance, Oh MY! There are all sorts of questions swirling around the use of social media by financial professionals. Most financial professionals I talk with have two questions:

1. Is it worth the time to use social media and can it actually help me grow my business?

2. What are the compliance issues around social media?

Can social media actually help you grow your business?

Many financial professionals I work with wonder if social media is just a waste of time. They want to know if it actually makes a difference to their bottom line.

The answer is, done right, using social media can absolutely help you grow your business. This is especially true if you want to connect with women. Women care not just about what you do, but who you are. They want to know what your values are. I know one woman who chose her financial advisor because he coached his daughter’s softball team. That sent her the message that this is a man who cares about raising strong daughters.

So how can social media help you grow your business?

1. It allows you to build deeper relationships with prospective and current clients.

2. It can help you position yourself as a subject matter expert.

Amy McIlwain is the President of Financial Social Media. Here’s what Amy has to say about the value of social media for financial professionals:

Social networking campaigns can also be used as a low-cost, high-impact way of positioning a business or individual as a thought-leader and industry expert. This will in turn open doors for business development such as leads, referrals, inquiries and most importantly, sales. Posting content that not only demonstrates expertise, but also creates relationships with followers and fans will help you grow your business

A recent study by Socialware looked at social media use by financial advisors:

While the industry continues working to adopt social media, it appears that financial advisors have taken matters into their own hands. More than 84% (up from 60% in 2010) of the 2011 survey respondents use social networks for business purposes, and this number is expected to continue growing based on survey feedback.

The other major question to address is whether or not social media can have a measurable impact on an advisor’s business. More than 30% of the respondents using social media for business have been able to cultivate referrals, and 35% have generated new prospects with many of these prospects converting to new clients.

One advisor commented that social media is a “great way for prospects and clients to learn more about us and deepen relationships.” In an industry that is driven by the quantity and quality of advisor relationships, this demonstrates the impact of social media. Clearly advisors are finding new ways of integrating social networks into their overall sales, marketing, and client retention plans.Here’s a great article from Financial Social Media about how to use social media to generate ROI – Integrating Online Communications to Make Offline Returns.

What are the compliance issues around social media?

Compliance can be a headache, but many financial advisors find ways to post meaningful content that is compliance approved.

For a cheat-sheet of guidelines, read Selling Financial Services to Women for guidelines, and other advice on how to use social media to grow your business.

For those of you who want the rule book on compliance issues, head over to Financial Social Media and download their compliance guide.

Other Articles:

How Women Can Gain Credibility with Men

Creating a Winning Client Communication System

Women and Finance Survey – What Marketing Images Do Women Prefer?

Read more about selling financial services to women on Holly Buchanan’s blog.