Advisers are warming up to social media.
More financial advisers are jumping onto Twitter and using social-networking platforms to communicate news and information with clients, according to a new survey from American Century Investments.
About 34% of advisers now have Twitter accounts, an increase from around 27% last year, the fourth annual survey of 301 advisers found.
“Our study found that more financial professionals are using social media to share news relevant to clients,” said Jamie Needham, American Century's digital-marketing strategist. “Twitter can be a very efficient way to share nuggets of information that add value.”
Compliance expert Michael Byrnes, president of Byrnes Consulting LLC, agrees that social media is the method advisers should increasingly be using to communicate electronically with clients instead of mass e-mails.
Next year, the average person is going to get more than 9,000 e-mails in his or her inbox, and most will be ignored, he said.
“If people aren't opening their e-mails, advisers will have to find another way to reach them,” Mr. Byrnes said.
Overall, only one in every 10 financial professionals said they don't have any kind of social-media account, according to the American Century survey, released yesterday. About 40% of advisers said they use social media for business several times a week, up from 31% who used it this way in 2012.
About 69% of advisers said their firms have a formal social-media policy or guidelines, up from 60% last year and 53% in 2011, according to the survey.
Over the past two years, the Securities and Exchange Commission and the Financial Industry Regulatory Authority Inc. have issued guidelines for how financial advisers and brokers should communicate using social media. In just the past few weeks, the SEC has issued further guidance for investment companies and public companies that seems to open the door for social-media use by all.
“There aren't any real excuses not to be on social media anymore,” Mr. Byrnes said.
Financial adviser John Friedman started using Twitter about nine months ago to help build his own reputation in the financial advice world. He doesn't use it for client communications.
Mr. Friedman, who owns an eponymous company, e-mails clients as a group if he has information to share, because that isn't something he wants to “share with the world.”
There are three main ways that advisers are putting social media to work for them. About 28% use social media to keep up on expert commentary and news, 14% use it to research people, and 13% use it to share news and other information with clients, the survey found.