Recently, a tenured adviser called me with a dilemma. His younger counterparts wanted him to purchase a social media system that would integrate blogs, posts, tweets and pictures on various platforms (e.g., Facebook, Twitter, LinkedIn and Instagram). In theory, it would work as a "lead-generating" machine. The adviser was skeptical, to say the least, and wanted my opinion on whether investing in social media was worth it. Now, if you're an adviser of a certain generation, this might sound familiar. You want to know, will the time, energy and money you put into social media efforts pay off for your business? It's not an easy question to answer, but I think there is insight to be gained by looking at how different generations of advisers approach this marketing strategy.
A TALE OF TWO GENERATIONS
Generally speaking, younger advisers have grown up on social media. They have faith that it will be a dominant marketing tool for finding new clients as our industry evolves. And they have a point. Millennials actively use social media, and those millennials are the clients of the future.
Indeed, the transfer of wealth is an interesting argument for the use of social media. But keep in mind that the oldest millennials are now just 36 years old. They won't be reaching their full earning potential for a decade or two. Today's baby boomers, on the other hand, are ages 53 to 71. With life expectancy reaching the 90s, the oldest boomers will control the money for decades. The full thrust of wealth transfer to social media-savvy kids won't happen for quite some time. I think this reality helps explain, in part, why tenured advisers may not be so quick to jump on the social media train.
Older advisers also tend to be less confident that potential clients use social media when it comes to selecting a financial adviser. Plus, if clients aren't asking for it, they wonder whether social media is worth significant investments of time and money. Some advisers have even expressed frustration when they see staff advisers — whose salaries they pay — spend time on sites like Facebook and Twitter without seeing any leads coming from their efforts.
I would agree that these are valid concerns. But whatever reservations you may have, it can't be denied that social media has arrived. According to the Pew Research Center, 69% of the American public uses some type of social media, and usage by older adults has increased in recent years. Plus, it's important for business leaders to be receptive to new ideas and technologies, especially when introduced by younger staff within a firm. So, what should you do? Find a social media strategy that makes sense for you.
MINIMIZE YOUR RISK
If you're ready to make a leap into social media but are still concerned about the cost, there are a few strategies that may help minimize the risk on your investment:
• Focus on one medium (e.g., Twitter, Facebook or LinkedIn). Spend the time learning what it could do for your firm. You might be surprised to find there are benefits beyond business development and that existing clients like it and use it.
• Allow younger advisers to have free rein. This means giving them the responsibility of building and maintaining your firm's social media presence.
• Gather hard data on the benefits of your chosen social media platform (e.g., leads generated) six months after it has been implemented.
• If there is a financial outlay required, suggest that younger advisers share the cost. You might then give them 90% of the leads that come from it.
Whatever strategy you choose, just be sure you have the margin to make this investment, in terms of both finances and time and energy.
IS IT HERE TO STAY?
We just don't know whether social media is here to stay. What we do know is that millennials are passionate about social media, and they have faith in its role as a key component of any marketing plan. As such, founder advisers have the responsibility to investigate whether social media could work for their firms. If you don't? You risk turning off the future generation of advisers — and, just maybe, clients.
Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.