Advisors that use Social Media Turn in Higher Growth Rates
The debate around the use of social media for the financial community prevails in both the industry and the financial media. How to harness the power of this tool to interact with clients and grow business while adhering to compliance concerns and ensuring reputation management is an ongoing debate. A couple of articles sparked my interest this week. Financial Planning magazine, in their article published 29 November entitled ‘Harnessing Social Media’ refer to a study by Aite Group which addresses the ways for FAs to harness social media tools such as Twitter, Facebook, and LinkedIn. They report, “While social media will not make sense in all organizations, more possibilities are opening up as the technology evolves. With 266 million users in North America, the Internet and social media have become a significant part of the financial services landscape.”
According to Aite’s findings: “While 87% of Gen Y (between 18-32 years old) and 82% of Gen X (33-44) are Internet users, a whopping 79% of younger boomers between 45 and 54 are on the Internet. Across all age groups the percentage of individuals who use email is 90% or higher, 20% of younger boomers use some sort of social networking tool and 70% of younger boomers get their news from the Internet.” The report suggests that, on the institutional side, social media is more relevant. It says: “It’s no surprise that many CCOs simply prefer to avoid the issue altogether. With time, however, the industry, aided by technological automation, will develop a means to accommodate behavior and intent through proper procedures and validation.”
Canada’s Investment Executive also covered the topic in an article entitled ‘Shifting demographics will have advisors serving a younger generation… Embracing technology will be particularly important’ claiming that, Advisors are facing a client base that is rapidly changing with aging clients beginning to retire and younger generations seeking out advice. They claim: “Generation Y is set to move into the workforce in a major way in the next decade. By 2020 Generation Y would make up 70% of the workforce, while aging baby boomers will comprise just 40%. As a result, advisors must cater their services to this younger generation, which tends to value transparency, efficiency, technology and convenience.” Investment Executive, referring to Executives at Univeris Corp, says that advisors are expected to increasingly embrace tools such as tablet computers, smart phones, social networking and Skype video conferencing in their day-to-day operations, a significant shift from the traditional methods.
I’ve worked in the financial services industry for the majority of my career and understand that, while face- to-face and traditional communications are imperative, as technology and social media and becomes part of the fabric of our communication with clients, we must embrace the tools in a compliant manner and leverage this powerful tool to grow business, increase customer confidence in financial decisions and, ultimately, make money!