Michael Kitces #FinTech

Small surveys reveal different points of view on advisers and social networking

Jun 28, 2010 @ 5:48 pm

By Davis D. Janowski

I thought I should share my thoughts on the results of two different, small, service provider surveys of financial advisers; one that is totally about social media usage and the other that just touches on the subject.

The first is from Socialware Inc. a provider in the social media monitoring and control segment.

Those results are based on responses from 190 advisers.

Specifically, the survey was sent to 4,500 Finra-regulated broker-dealer reps.

Chad Bockius, chief executive of Socialware, said that the list had been put together with partners and had not been filtered in any way.

Among their promising findings: 60% of those surveyed currently use social media for business purposes, 11% don't use social media, and of the 29% with no plans to use social media in the future, 85% of them reported that they are currently prohibited by their firms from doing so.

It would seem that those surveyed in the Socialware survey have been fairly successful: 47% of respondents report having identified one or more referrals from their social media activity, 36% have acquired new customers through social media, and 10% stated they identified over 21 new referrals (wow!).

That success has made some of the respondents a bit cocky too: 32% of the respondents are operating without a social media policy and that makes them in direct violation of Finra's recent guidance on social network usage. Some 11% of the respondents were unsure if their firm even had a policy (again, wow!).

As far as a demographic breakdown, 40% of respondents are 46 years old or older, 21% of them are with large firms that have 100 or more advisers, 53% of the respondents have more than 100 clients, and 44% of respondents have an average account size of $300,000 or more,

Many of you will recall that Socialware is the first company to provide a middleware approach and solution for helping companies of all types to turn on, as well as selectively control features on social media applications including LinkedIn, Facebook, and Twitter.

The second survey is from the SEI Advisor Network, a third-party provider to financial advisers that supplies them with a host of different services, from turnkey wealth management to outsourced investment strategies, administration and technology platforms and quite a few other things.

Their survey was conducted in May at SEI's National Strategic Advisor Conference, a meeting of fairly elite “strategic advisors” that work with SEI.

Most interesting for me among the findings was that while 54% of the 150 adviser respondents do acknowledge participating in at least one online social community, less than five percent actively use social networking as a prospecting tool (wow!).

Perhaps that's not too surprising given the demographics of this survey: 22% of them have more than $250 million in assets under management and 74% manage between $50 million and $250 million assets. In addition, 70% have been advisers for more than 15 years and 63% manage a range of 50 to 200 clients

Among other things the survey found that just 16% of these advisers spend the majority of their day on new client outreach, compared to 46% who spend the majority of their day working with existing clients.

SEI's survey found that those advisers surveyed responded that, in terms of prospecting, they were taking the more traditional route of going after “centers of influence,” the most popular being CPAs and accountants.

Some 45% of advisers rely on these and other professionals for leads; 52% reported that besides centers of influence, their most popular tool for creating new business leads were “bring a friend” client-appreciation events.

It's hard to draw much in the way of concrete conclusions based on these surveys. They cannot be compared in apples to apples terms. The Socialware survey went exclusively to registered reps while the SEI survey was mostly made up of RIAs.

Both surveys seemed to go to a lot of big firms.

It would appear, however, that big established firms are less interested in leveraging social media when there seems to be low hanging fruit in the form allied professionals whose clients are in need of their services (though it sure seems like it would be simpler for those firms to make that realization using something like LinkedIn where such allied professionals congregate anyway).

It would also appear that reps affiliated with broker-dealers, even larger independent shops, are anxious to make better use of social networking — even if that poses a compliance and regulatory danger to them.

Related stories:

Making the most of social networking

Advisers approach Google's Buzz with caution

Socialware could bring B-Ds, large RIA firms into the modern world

Arkovi, hope for advisers who want to tweet – but not delete

New networking site for advisers said to comply with Finra regs

LinkedFA responds


Dexrex on social media

Investors using social media to glean investment advice, study shows


What do you think?

View comments

Recommended next

Upcoming event

Nov 20


Future of Financial Advice

An innovative conference dedicated to improving the client experience by enhancing digital technology, mainstreaming healthcare and optimizing wealth management strategies.The Future of Financial Advice will provide a forum for... Learn more


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print