Financial advisers may say they're confused by what constitutes proper use of social media in marketing. Nonetheless, a new survey reveals that advisers are increasingly turning to online networking sites such as Twitter, Facebook and LinkedIn to reach out to prospects and clients. At the same time, it appears cold calling has gone the way of Betamax and the woolly mammoth.
An online poll of advisers conducted recently by SEI Advisor Network, a financial adviser service provider, found that advisers have abandoned phoning prospects, with more using social media sites to prospect for customers. Indeed, one out of five advisers said they had used social media sites to introduce themselves to at least one prospect so far in 2011. Conversely, not one of the respondents said they cold-call for new clients.
Tim Shanahan, an adviser with Compass Capital Corp. is one adviser who has fully immersed himself in social media. Though he shuns Facebook over regulatory concerns, he has a blog, as well as LinkedIn and Twitter accounts. Typical posts include items about changes at the firm, investing and human interest items. Of the three, the human interest postings receive the greatest number of responses, which surprised him.
Still, Mr. Shanahan and others who make frequent use of online media may be the exception rather than the rule.
“More are using these sites, but the challenge is that regulations are kind of murky in regard to what you can and cannot do,” said John Anderson, head of practice management at SEI Advisor Network. As a result, many advisers put up Facebook or LinkedIn pages, and then never got around to doing anything else with them.
Indeed, follow-through seems to be a weak point for many advisers — and they know it. Nearly two out of three admitted that lack of frequency in their client communications was their biggest shortcoming. A much smaller percentage worried about timely, concise or understandable communications.
That could be a big mistake. A recent survey of millionaires conducted by the Spectrem Group found that 72% of respondents indicated the most common reason they dump an adviser is because of the adviser's failure to return a phone call in an expedient fashion.
And what qualifies as expedient? Well, 40% of respondents said they expect to hear back from their financial adviser within two hours of an initial call. (Click the following link to read more about the Spectrem survey)