Social Networking And Advisors

Financial Advisor Magazine

Advisors are barely scratching the surface in their use of social networking.
By Andrew Gluck
Of all the social networking Web sites, LinkedIn is the one financial advisors use most. …
Not a lot of reliable data are available yet on the business use of social networking applications. We don’t have much demographic data about who is on each social network or the business benefits of tweeting on Twitter versus connecting on LinkedIn or friending on Facebook. But here are some thoughts that might be valuable as you decide which sites to use for growing your advisory firm and exchanging ideas with other professionals.
They’re Not Just for Kids. According to a study released by Anderson Analytics, SPSS and LinkedIn, the number of C-level executives on LinkedIn numbered 2.2 million worldwide last summer, while there were 1.9 million executive vice presidents and senior vice presidents on the network. Some 4.5 million users said they were senior management, while 5.2 million said they were middle management. About half of the users worldwide are in the U.S., and the base was growing last year at a rate of 2 million a month.
By contrast, Twitter users are overwhelmingly young, according to a study by Pew Research Center released in February. However, … Twitter is not dominated by the youngest of young adults. Indeed, the median age of a Twitter user is 31. In comparison, the median age of a MySpace user is 27, while it’s 26 for a Facebook user and 40.5 for a LinkedIn user, according to the Pew study.
… In the U.S., users between the ages of 55 and 64 made up 10% of Twitter’s total, which is nearly the same figure for those users between ages 18 and 24, who accounted for 10.6%. So you are seeing older Americans adopt social networking at an astounding rate.
Say Something Nice. Unlike traditional marketing, social networking is totally based on being nice to other people and not just selling your services. The key to successful marketing is giving valuable information to your target market. For instance, an advisor trying to market to doctors might post a blog offering a case study of changes he made to a doctor’s financial plan after the market meltdown of last year, and then tweet about that. … Another nice thing to do is establish a group on LinkedIn for doctors in a particular geographic area in need of financial and business management advice. …
Target, Target, Target. Just as the old adage emphasizes “location” as crucial to real estate values, it’s also crucial to target your marketing when you’re social networking. The more focused you are, the more likely you are to find an underserved niche that needs you and the less likely you are to encounter competitors. …  I recently gave a Webinar in which I explained how to automatically tweet your Google alerts. It makes sense to tweet such information because Twitter is good for distributing news. LinkedIn, meanwhile, is better for networking and creating groups.
Find Prospects. Both LinkedIn and Twitter are good ways to find prospects, and though one fishing strategy is not very nice, you should know about it anyway—and that’s looking into your competitors’ networks. While LinkedIn lets you hide your own network from the public and Twitter lets you block people you don’t know from receiving your tweets, the public (and competitors) can still see who is in your network even when you make your updates to Twitter private. So you may want to avoid connecting with clients on Twitter and only use it for prospecting.
To find prospects on LinkedIn, you can search its vast database, clicking “search,” and then narrowing that search on the pull-down menu to “search companies.” …
To find prospects on Twitter, you can search site profiles using some of the new Twitter search engines popping up, including: Tweepsearch, Twellow, Twubble and Mr. Tweet. Also check out a promising new registry for business-to-business searches on Twitter called Twibs. …
 
Compliance. Regulators offer little guidance about how advisors can use the new tools of social networking, apart from referencing existing advertising rules. …
To be sure, existing regulations are clear on many aspects of social networking. Still, it could save broker-dealers and RIAs a lot of money if the SEC and FINRA would offer more guidance, because then technology systems could be built to accommodate the rules. …
In the meantime, registered reps are clearly at a disadvantage, since some B/Ds are simply banning the use of certain social networking sites. Many have forbidden the use of Twitter or blog-writing by their reps.