A 3-phase approach to making social media work for you

Diving into social media without the right strategy could do you more harm than good.

Though advisers are increasingly using social media, many continue to tell us that compliance concerns, resource constraints and a lack of familiarity are keeping them on the sidelines. That’s understandable, but it’s tough to overlook the torrent of industry studies demonstrating that investors, especially the highly affluent, are rapidly embracing social media for vital investment and market information.

A 2013 study by Cogent Research found that 53% of affluent investors expect to receive relevant and timely content from social media platforms. Nearly half — 45% — said they would value real-time interaction and conversation with an adviser or other investors, just the kind of connection that social media supports so effectively. Smartphones have enabled our ability to access breaking news at a staggering rate, and investors will demand the same type of real-time contact with advisers.

When it comes to addressing the interests of increasingly tech-savvy investors, social media can help advisers deploy technology in ways that do not threaten — and, indeed, can enhance — their own, indispensable role at the center of the advice process.

Advisers not using social media today risk being left behind or, at the very least, seeming less relevant. Failure to create a social media presence can blunt an adviser’s effectiveness at generating new business. That said, diving into social media without firm buy-in and without the right strategy could do more harm than good. We recommend a three-phased approach:

Phase 1: Distribute existing content: Advisers can start building a comfort level with social media by using it to effectively supplement their existing distribution of compliance-approved content. Ease into social media by treating it as just one more way to distribute information, perspectives and thought leadership already available via collateral and posts on a firm’s website.

Distributing content via Facebook or LinkedIn also can create opportunities for more efficient and effective targeted marketing.

But social media’s benefits go beyond an easily accessible way to distribute information. It also lets advisers understand their clients’ values and observe marketplace trends. By monitoring social media, advisers can better comprehend clients’ expectations, as well as get to know them on a more personal level.

Phase 2: Share timely news and information with clients: In a 24/7 news cycle, advisers play a vital role in helping clients sort through noise and chatter to pinpoint the things with real implications for their portfolios and investment decision making.

Of course, the information flow can be dynamic and unpredictable, but much is generated by regularly scheduled market and economic reports, like Fed meetings or jobs and housing reports. More and more advisers are “calendarizing” these events so they can create and distribute content on a highly timely and easily anticipated basis to clients.

Calendarizing is time- and cost-efficient, and a practical solution.

(More insight: Are you making a mountain out of joining social media?)

Phase 3: Create context and generate engagement: Using social media as one more way to communicate and engage enhances an adviser’s transparency. Actively participating in social media dialogue helps clients and other investors get to know an adviser on a more personal level, and grasp the firm’s culture even before they attend an in-person meeting.

No robo-adviser can provide the type of personal transparency that is cultivated through active use of social media. Furthermore, no robo-adviser can provide the timely context and perspective that an investor needs to make sense of all the news and information increasingly available on both social and traditional media. Only an experienced, professional adviser can support a genuinely meaningful dialogue with investors about how best to put that context and perspective to work.

We think that, ultimately, one of social media’s most powerful benefits will be the edge it gives to the adviser’s ability to efficiently craft and quickly deliver the “meaning” of raw market and investment information, and at the same time invite and maintain a beneficial dialogue with clients. Advisers who so apply social media can become true influencers — and grab mind- and market-share from advisers who stay on the social media sidelines.

Lincoln Ross is executive vice president at Envestnet Inc.