Financial professionals have a greater understanding of the value of social media and are seeing dividends from increased use of social media. That is the essence of the findings from the annual Financial Professionals Social Media Adoption Study from American Century Investments.
The vast majority of financial professionals have at least some experience with social media — 60% of respondents had moderate or extensive social media experience while only 5% had no experience at all. Facebook and LinkedIn are clearly the most used platforms with 75% of respondents having Facebook accounts and 70% having LinkedIn accounts. Twitter is far behind at 37%, and YouTube, Google, and Instagram all in the 23% to 27% range.
LinkedIn is a clear favorite among financial professionals, and has shown the greatest return on efforts. 48% of respondents reported that LinkedIn had enhanced their profile with clients, 28% reported enhanced business knowledge and a same percentage reported improved referrals. However, most financial professionals are sticking with the basic LinkedIn services. 77% use none of the LinkedIn Premium Services. Of those services, Business Plus was the most popular, claiming 9% of respondents.
In the three categories of monitoring market and industry news, finding expert commentary, and brand promotion, LinkedIn was by far the preferred social media choice with 29% to 31% positive responses in all three categories. No other social media outlet had above 15%.
52% of respondents believe that business connections on social media make it more likely that the connection will do business with them and 43% of respondents give social media credit for at least some return on investment. 27% have seen returns of $1 million or less, 10% saw returns between $1 million and $3 million, 4% saw returns between $3 million and $5 million, and 3% enjoyed returns above $5 million.
The two major uses of social media for businesses covered both sides of the information exchange. 28% of financial planners used it for input by reading expert commentary and insights from other social media postings, and 17% used social media as a vehicle to share their views on financial news while providing relevant content.
Again, content is key. The main reason listed to follow an asset manager’s social media activity is to find content that is not available anywhere else. Useful new content was cited by 54% of respondents as the main motivator to follow a particular site, followed by a user-friendly site (42%) and an engaging author personality (37%).
Simply having a social media presence is not enough; you have to manage it correctly and stay within certain guidelines. Deal-breaking activities that preclude customers from doing business with a firm include a lack of professionalism (59%), privacy or data breaches (57%), excessive political crusading (39%), and the scourge of all web content — irrelevant or boring posts.
When asked about the single biggest concern with using social media for business purposes, 32% of respondents chose regulatory/compliance issues, which is not surprising given the potential gray areas of what could be considered endorsement (re-Tweeting and liking Facebook pages are useful examples). Others were concerned about potential privacy breaches (25%) and company/home office restrictions on use (23%).
Social media appears to be catching on with financial professionals, and it is likely to become eventually a standard tool that distinguishes the savvy professional with a growing practice from the old-school advisor who cannot change with the times. Those who adapt will survive and thrive. Those who do not may have difficulty holding on to their business.