Technology Update

Advisers are harnessing Internet for social networking

They aim to attract clients, develop relationships with other professionals

Apr 26, 2009 @ 12:01 am

By Davis D. Janowski

A legion of intrepid financial advisers are twittering, linking in and in many other ways harnessing the power of the Internet to network socially in a bid to expand their practices. They are making use of social-networking websites to attract clients, to develop relationships with accountants, attorneys and other advisers, and also to display their expertise. For example, advisers' responses to questions that are posted on the LinkedIn site can be read by thousands of members who can in turn contact them for more information. There has been an uptick of late in interest among advisers in social networking, said Kristen Luke, a marketing consultant to independent advisers for Wealth Management Marketing of San Diego. For instance, this past Monday, 40 advisers participated in her online webinar on social marketing. LinkedIn is "probably the best site because there are so many people on it [just fewer than 40 million, with 1.5 million of them in "financial services"], and you can really find your target demographic," Ms. Luke said.
The site's single best feature of which advisers can take advantage is its easy-to-search and simple-to-join groups function that allows easy access to like-minded advisers and other professionals. Joining LinkedIn and similar groups is one thing, but making full use of them is often another. Increasingly, in meetings with advisers, a majority of hands go up when asking who uses LinkedIn, though few post regularly, said Kip Gregory, a consultant and principal with The Gregory Group, a Washington-based firm that helps advisers apply technology. LinkedIn is a subsidiary of LinkedIn Corp. of Mountain View, Calif., and can be ac-cessed at Mr. Gregory encourages advisers to join groups that are related to their practices, such as RIA Marketplace, which has 1,325 members, and 401K, which has 1,599 members. "To be able to plug into a group and then be able to start seeing who the movers and shakers are, what keeps them up at night, what they are reading, that's really invaluable business intelligence," said Mr. Gregory, the author of "Winning Clients in a Wired World" (John Wiley & Sons Inc., 2004). "If you are looking at units of time, I would encourage advisers to spend the bulk of what they allocate to social networking to LinkedIn, hands down, right now." Rich Krasney, principal of RJK Wealth Management LLC in Parsippany, N.J., said that social networking is helpful to independent advisers who are building their practices. "It's not just about the online connection itself, either," he said. "It's about the act of connecting, of finding a common area of interest, and then taking that to the next step, taking it offline and developing a real relationship from there." Social networking is an inexpensive way to market an advisory business. "To the extent that you can use all the social-networking technology for that purpose, that's where you get the real bang for not necessarily spending any bucks. I've connected with people I never would have connected with [in terms of professionals and client leads] through e-mail or a phone call or even a blog, but I did so with ease on LinkedIn and Twitter," Mr. Krasney said.

Although attracting clients might be the goal, be careful not to self-promote too much, said Chuck Rylant, a principal at C.J. Rylant Wealth Management, a fee-only adviser in Santa Maria, Calif.

"I'm like everyone else when it comes to Twitter and Facebook, and get sick of seeing people who constantly promote themselves," he said, referring to either outright advertising or thinly veiled references to marketing. "What I've found is that when you just sincerely interact with folks and show a real interest, then when you least expect it you'll hear from them for business."

Mr. Rylant is an avid user of LinkedIn; Twitter, a personal-updates site from Twitter Inc. of San Francisco (; and Facebook, a social-networking site from Facebook Inc. of Palo Alto, Calif. (; but he cautions that participation requires him to keep his profile updated, to answer questions promptly and to maintain his blogs on LinkedIn.

In addition, he makes an effort to keep his Facebook content more personal with photos and less focus on financial planning than on other sites. On Twitter, he mixes business and personal content.

To ensure that they are compliant with Securities and Exchange Commission and Financial Industry Regulatory Authority Inc. regulations, advisers need to be diligent about saving everything they post in a compliance file, said Bill Winterberg, who maintains the technology blog and who is an operations and efficiency consultant to advisory firms in Portland, Ore.

Advisers should treat such online content just as they do postcards used in their e-mail and snail mail campaigns that their prospects receive.

"In most instances, [registered representatives] are going to have to get prior approval for anything they might want to post on any of these sites," Mr. Winterberg said.

That is because Finra of New York and Washington, and the SEC, consider anything posted on the Internet an advertisement, he said.

E-mail Davis D. Janowski at


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