The Case for Social Media in Financial Services

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Financial advisor social mediaI recently heard an experienced and successful financial professional ask “Isn’t it true that LinkedIn is nothing more than a job search platform where we can identify people changing jobs and send them messages?”

This kind of short-sighted thinking about how to leverage social media is truly frightening, but it’s also a tremendous opportunity for the forward-thinking financial advisors and firms who are evolving their businesses in the age of social media. This is the greatest opportunity of our time.

The  lack of understanding that so many seasoned financial professionals have about the power, depth, and breadth of social networks as well as how to leverage these networks to enhance the client experience and develop new client relationships is astonishing. To frame social networking as merely a hunt and kill prospecting opportunity is completely missing the mark and will continue to damage the collective reputation of the industry.

Additionally, the false assumption that college kids who understand social technologies also understand the high trust business of client retention and acquisition is another big area of concern.

With the coming of age of social networking, we have mind-blowing access and insight into people’s lives, collective data, and expanded network connections that we’ve never had before. The importance of getting this right cannot be underestimated. The internet is permanent. It’s written in ink and indexed forever.

Creating a Unique Client Experience

Social media is not just about marketing, it’s about enhancing the total client experience in addition to attracting new prospects and business advocates into that unique experience. It’s about being visible, valuable and accessible in the places where clients and prospects are spending their time.

Differentiation in the age of social media is about building this unique experience for your clients and attracting new clients into the experience by showing them what they are missing. Prospects will wonder how their lives might be improved if they work with you or your firm!

Real time communication combined with rich experiences online and portable mobile apps are the reasons why we have become so hyper-connected. If your business is not evolving to create relevant online and social media experiences for clients and prospects, you will put your firm at risk. It may be a slow bleed, but the bleeding will happen and it will be a slow, painful death.

 What are the True Competitive Risks?

Innovative online competitors are everywhere.

New companies are displacing traditional companies and financial advisory firms that have been around for decades. Innovative financial companies like Personal Capital are positioning themselves to capture client data first, and layer on professional advisory services second. Now there’s an entirely new generation of rich advisory services coming to market that you will potentially be competing with.

Today, trust isn’t as much about disclosing financial data as it is believing in and consistently implementing the advice and guidance delivered.  Those firms that can capture the data could pose a real threat to traditional advisory firms who falsely believe that clients are not willing to give up information to these new firms offering a unique value proposition.

Should you be worried? It is too soon to tell if the new breed of digital financial advisory firm will gain traction, but these firms are leveraging social media channels to build prospective client pipelines and most likely will be able to influence behavior of younger generations who are inheriting wealth.

Don’t be too comfortable with the traditional “stickiness” of existing client relationships.

Not only is it easier than ever and more common for clients to have multiple advisory relationships, it’s simple for them to transfer assets elsewhere. The transfer process is a piece of cake. Your clients are getting all kinds of compelling offers empowering them to better themselves and make changes with regard to their wealth.

Also, the barrier for your existing clients to connect with and be influenced by other financial advisors is much lower than ever before because of social media. Newer financial advisors can now successfully compete with seasoned advisors because after all, the internet is the great equalizer. These new financial advisors are building online communities and developing prospect pipelines with YOUR clients. If your firm is not present online and actively leading clients, your clients will be exposed to and influenced by many other firms and advisors who are.

If you don’t have the ability to provide high trust communications and high touch service in a high tech environment, you will lose business to competitors who are consistently cultivating client relationships through blogging, social media, and email marketing programs.

Financial advisors and firms who embrace the digital movement and adopt a comprehensive digital marketing approach will be much better positioned to compete in a wired world.

Your Clients Need You to Lead Them

If you are not leading your clients online, who will? It’s no longer major media outlets like CNBC that you have to worry about anymore. Every financial advisory and firm can become a powerful and influential media company in your community offering educational media programming that can teach, lead, inspire, and motivate your clients to make decisions about their money.

Now more than ever your clients and prospects have thousands of channels from which they can consume content. If you don’t have your media channel out there, you will not be relevant and you will put your business at risk.

No longer will clients be questioning your opinion based upon a Wall Street Journal article they’ve read or an expert they’ve heard on CNBC, the questions will come from the messages they have discovered and received from your direct competitors through blog content, social media, and email communications.

Get ahead of this curve by claiming your stake online through a professional blogging hub and optimized social media channels on sites like LinkedIn, Facebook, Twitter, and You Tube, and fill those channels with unique and compelling content to position you and your firm as the central resource for client information, guidance, and leadership.

Again, it’s about creating a unique online client experience to keep clients and prospects informed, engaged, interested, and confident in their decision to work with you.

Capturing the Next Generation

The idea of retaining assets passed down to the next generation from your existing clients doesn’t seem to concern many advisors, but that time is actually upon us now. Most of the inheritors don’t have solid relationships with parents’ trusted advisors, nor do they stay with those advisors.

If you’re not worried about the generational risk to your business and you’re not positioning to reach and connect with that next generation, you will witness a deterioration of your client base over time. Next generation assets are low-hanging fruit and every opportunity should be taken to develop and retain these relationships!

To capture the next generation, you must get in front of them and meet them where they are. Get that next generation to know, like, and trust you through connecting with them on social channels and distributing your thought leadership consistently through blog-driven thought leadership content that speaks to their needs and concerns (i.e. not outliving retirement assets, caring for aging parents). If you don’t do it, your competitors will.

It Pays to Be Early

The money you save today by putting off your investment in building a powerful digital presence will be dwarfed by the cost of waiting. It will be difficult and expensive to catch up. Online assets, including social media profiles, are investments in the future of your business. These digital assets build equity over time and pay dividends. They are permanent assets, not one-time investments.

The value of investing in professional help to generate ROI from social media strategy AND to minimize your risks (time, resources, technology, missteps) is also important. What resources do you have access to? What is your time worth? Are you inclined to learn the rules, tools, and technologies on your own? Do you have competent staff to develop, implement, and successfully manage a program? Do you want to look like every other advisory firm out there or do you believe it’s important to create unique and compelling content that will help you stand out?

Consider the simple chart below when making decisions about building and activating your digital marketing program:

Investing in an Inbound Marketing Program

Investing in an Inbound Marketing Program

The ROI of Social Media is Real in the Context of Relationships

The road to achieving ROI with a digital business and marketing strategy requires first understanding the way that people search, research, evaluate, and decide to make decisions about their wealth today. In the past having a static website was enough to be credible, but today, you need a comprehensive, dynamic presence that can educate clients and prospects, and essentially provide them with a totally unique experience.

The concept of Digital Marketing is much more comprehensive than just “social media”, but social media is an extremely important component of the portfolio. In addition to a well-developed and active social media presence, you need a centralized hub for showcasing your thought leadership (a professional blog), creative and compelling content to publish and share with your target markets, special offers and calls to action to capture and cultivate leads, an email marketing for systematic lead nurturing, and an analytics and reporting system that ties everything together so you can truly evaluate your progress.

Those advisors and firms who implement a comprehensive digital marketing program will leverage existing client relationships to seed and grow their online influence which will lead to more assets, more referrals, and brand new client relationship opportunities.

Consider the digital marketing portfolio below for evolving into a modern financial advisory firm:


You don’t need the masses to succeed in growing your business

Retaining existing clients (and future generations) and gathering more assets and referrals from those clients as well as capturing a handful of highly qualified new clients each year can help you to achieve significant and sustainable growth in your business long-term.

Social media provides an opportunity to build an amazing experience for your clients while simultaneously attracting ideal prospects into your community. Combining all of the components of a Comprehensive Digital Marketing Portfolio will create the ultimate experience for your trusted network of followers, and allow you to grow your business exponentially. Don’t get left behind due to fear and false beliefs. Start accepting that this hyper-connected “social” world is the new normal!

What are your thoughts about social media for your business? Do you believe in the opportunity? What steps are you taking to evolve your business?

Learn More About Wired Advisor Digital Marketing Programs

photo credit: s_falkow via photopin cc

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About Stephanie Sammons

Stephanie Sammons is the founder and CEO of Wired Advisor™. She's been named one of the Top 25 Social Media Experts You Need to Know by LinkedIn and a Top Financial Industry Blogger by RIABiz. As a CFP® and former 15-year financial advisor, Stephanie combines her "in the trenches" industry knowledge with her extensive digital marketing experience to teach financial advisors how to win and keep clients in a wired world. Follow Stephanie on Twitter and Google+.

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  • @Tstairsmac

    Fantastic post Stephanie. Question though….what is the best way to pursue this strategy given still tight regulation around SM strategy in the business? I am in Canada where reg lags the US. I’m considering building more generic online assets that position me personally. Then when regulation eases I can tie to my advisory business. Thoughts?

    • http://www.wiredadvisor.com/about Stephanie Sammons

      I think that’s a great approach. We build relationships about common interests. What are you passionate about? What do you enjoy? There’s a very successful financial advisor blogger who can’t participate in SM for business but has built an incredible following, which has ultimately resulted in new client relationships over time! Check him out here: http://www.triboomer.com

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