Advisers are latching on to social media giants such as LinkedIn and Facebook to increase their business, and it's paying off.
Putnam Investments' latest survey of how advisers are using social media found that those who have acquired clients through social media initiatives report booking a median of almost $2 million in assets as a result, nearly triple the level of last year's respondents.
Over 700 financial institutions were surveyed and 66% of advisers surveyed credit social media for helping them gain new clients, up from 49% in last year's survey. LinkedIn, the world's largest professional network, has led the way as the primary social network used by advisers.
“At some firms it is becoming mandatory to be on social media,” said Mark McKenna, head of global marketing at Putnam. “Digital is going to become the predominant way advisers are going to be connecting with their clients.”
Female advisers are leveraging their social media presence more than their male counterparts and tend to use Facebook to attract clients. More than half of women surveyed give social media a significant marketing role and use multiple networking platforms for their business.
“There is clearly a trust factor you can see on social media,” Mr. McKenna said. “Advisers need to be more comfortable sharing their personal backgrounds to build relationships and that's what we see happening.”
A typical financial adviser using social media for business works at a wirehouse, has 11 years' experience and is active on three networks. He or she runs a book of business with an average of $84 million under management and has clients with a median of $900,000 in assets.