Social media boosts adviser-client relationship amid pandemic

Social media reigned as the king communication portal among investors during the COVID-19 pandemic, according to data released Monday by Broadridge Financial Solutions.

In fact, of 1,000 North American investors surveyed in June, 87% of Millennials and 86% of Gen Z said they are comfortable with their adviser following them on social media to offer a more customized experience, according to Broadridge. By comparison, 60% of Gen X and 20% of Baby Boomers said they felt comfortable with the practice.

For financial advisers, an increase in social media usage equates to another digital-first avenue to understand their clients on a personal level, which can result in a more customized analysis of investing habits, according to the data.

It’s no secret that social media platforms, like Facebook and Instagram, have become a part of the societal norm among Americans. About 72% of Americans use some type of social media, according to data from the Pew Research Center.

Facebook snagged the top spot for most popular social media platform where 66% of Millennials and 46% of Gen X would feel comfortable with their adviser following them online. Meanwhile, more than half (53%) of Gen Z is most comfortable with advisers following them on Instagram.

Still, other mediums like phone calls, emails and video chat are of interest for Gen X and Baby Boomers, the survey noted.

Advisers can take advantage of social media usage to differentiate themselves and attract younger investors who prefer a financial planner with a tech-savvy online presence, according to State Street Global Advisors head of independent wealth management Kelly Ryan. “Younger investors are not going to go to just any adviser, they want someone that can relate to them,” she said.

Broadridge’s head of wealth solutions Traci Mabrey agreed, saying the survey findings open the door for advisers to cultivate social media as digital adoption is a part of the new norm. Moreover, social media can serve as the first portal for advisers to begin generational wealth transfer discussions.

“Advisers can have more collaborative virtual engagement across social media channels to bring in the younger generation both independently and as a generational family transfer,” Mabrey said, noting that the survey results show 44% of investors reported their adviser has not communicated with their spouse, partner, children or grandchildren.

Finally, advisers should use social media as an opportunity to increase financial literacy and education.

“We found that individuals are now aware on an investment basis of what a fiduciary role of an adviser is, and that they're interested in learning more,” Mabrey said. “Conversely, certain programs such as a low cost alternative loan or securities-based lending, are something investors may not know as much about."

As a result, there are opportunities for advisers to educate, inform and hopefully now inspire investors to have long-term relationships with financial advisers.