Tweet-challenged? Bulk of advisers still don't use social media for business

Spooked by compliance concerns, survey finds; lack of time also cited

Feb 3, 2013 @ 12:01 am

By Liz Skinner

Compliance concerns continue to keep most financial planners from using social networks such as LinkedIn, Twitter and Facebook for professional purposes.

Only 45% of advisers and planners said they use social media for work, even though nearly three-quarters of them use the sites personally, according to a survey of 3,532 professionals with the certified financial planner designation.

Of the CFPs who don't use social media for work, 37% blamed compliance prohibitions while 33% said the uncertainty about compliance kept them off. Twenty percent cited a lack of time, the Certified Financial Planner Board of Standards Inc. said in releasing the results on Thursday.

Among the advisers who use social media, 45% do so to communicate with other financial professionals, making networking the top professional activity that leads advisers to log onto these sites. About 43% use social media to stay on top of business and industry news and third use it for marketing, the survey said.

“It's absolutely imperative that advisers begin to embrace social media,” said Kevin Keller, chief executive of the CFP Board. “The opportunity is in engaging with clients and raising an adviser's profile with prospective clients and depending on how it's implemented, positioning him or herself as a thought leader.”

Mr. Keller said the advisory industry needs to evolve “beyond client communication rules that were written when advisers were generating newsletters on a mimeograph machine.”

Financial adviser Bob Rall of Rall Capital Management said he has a Facebook page and a LinkedIn account for the company, as well as a Google+ account and a Twitter feed.

“The best thing it's done for my business is to let people know who I am and what I am about,” he said.

Mr. Rall, a sole practitioner, said he doesn't have to worry about the compliance issues that larger firms do because he's the only person at the firm who posts to sites. His greatest social media challenge is finding the one to two hours he spends each day crafting a good social media campaign.

The biggest hurdle for the advisory industry's use of social media today is “how to train and change the DNA of the firm and migrating advisers to a place where they want to get social,” said Joanna Belbey, a social media and compliance specialist with Actiance Inc.

Advisers need to know they can use social media to bring in new assets to the firm, she said. For instance, one New Jersey broker whose firm didn't even allow him to post messages on LinkedIn, only to “watch,” recently won a new $3 million account from a connection who he noticed had just retired.

“He called and congratulated the person, and after a few more conversations, she became a client,” Ms. Belbey said.

Advisers using social media professionally are most likely to be using LinkedIn, with 82% of the respondents indicating they have such a business account. That was followed by blogs, 72%, Twitter, 46%, Google+, 35%, and Facebook, 20%, according to the CFP Board survey.

The CFP Board also issued a 12-page guide Thursday with tips for advisers on getting started with LinkedIn and other social-media sites. It largely mirrors guidelines that the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. have issued regarding adviser advertising and client communications.

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