Michael Kitces #FinTech

Why social media won't work for you

Whether it's the time you spend or the content you post, you need to think long and hard before jumping in

Jan 16, 2014 @ 12:01 am

By Kristen Luke

I often talk to financial advisers who tell me they should be doing social-media marketing. My response is always, “Why?”

If you have read any industry publication in the last five years, you can't help but be convinced that social media will solve all your prospecting woes. But in reality, if you are like most advisers, social media probably won't work for you. (Has financial press overhyped social media?) Here is why.

You'll use canned content. If you are like many advisers who want to engage in social media, but don't have the time, you'll seek out a service that will post generic content automatically to your social-media profiles so that you don't have to do a thing. This is even truer if you have strict compliance restrictions requiring you to use preapproved content. Posting generic content on social media is a huge waste of time and money since it is the same information everyone else is posting and is guaranteed to be uninteresting to your prospective clients. Advisers who are truly successful generating new clients from social media create their own content (articles, videos, podcasts, photos, white papers, e-books) and write custom posts demonstrating their true expertise and value.

You won't be engaged. Once you have found a way to post content easily, you won't bother even to look at your social-media profiles in the rare instance that someone is actually engaging with your generic content. You won't read other people's posts and interact with what they are saying. It's like going to a networking event where you sit in the back of the room and don't talk to anyone. Sure, you showed up, but you can't expect to see any results from the little effort you put forth. Successful advisers take a real interest in their social networks and interact on a regular basis, just as they would in person.

You'll connect with the wrong audience. When you first start using social media, you'll naturally gravitate to your colleagues — other financial advisers. Slowly you'll expand your network to several hundred people and then realize that your entire network is made up of people who technically are your competition. Instead, to be successful, you should focus on building your social networks around your clients by networking contacts in your target market and pursuing centers of influence. While it is acceptable to connect with your colleagues, you are more likely to generate new clients if you are engaging with prospective ones.

You aren't willing to put in the time. Many advisers gravitate toward social media since it is free marketing. While social media is free, it sure isn't cheap. The amount of your time or your staff's time it will take to do well can ultimately make it an expensive marketing tactic. Most likely, you won't put in the time it takes to build your network, develop your online voice, create original content, find and post content relevant to your target audience, and engage with your network. Financial advisers who are truly successful with social media spend many hours a week doing just these things.

That said, even if you aren't willing to do all that it takes to generate new clients, social media can still be useful tool. It can provide a way to stay top-of-mind with your existing relationships and also provides some search engine optimization benefits. Before you invest too much time and money on social media, just be clear on what you are trying to achieve, and set realistic expectations, given the amount of effort you are willing to put into it. You may just come to the conclusion that social media won't work for you and that your time, money and energy is better spent on more traditional marketing tactics.

Kristen Luke is president and chief executive of Wealth Management Marketing Inc. and co-founder of The Mercato, an online marketplace featuring do-it-yourself tools, templates and training for financial advisers. Follow her on Twitter: @KristenLuke. You can also find her in the Business Consulting Lounge at TD Ameritrade's National Conference in Orlando on Jan. 30 and 31.


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