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How Advisors Can Use Social Media to Gain Influence and Clients

StratiFi Technologies Inc

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Today, the vast majority of a financial advisor’s potential clients reside in a parallel universe called social media – a digital cosmos that exists alongside the physical world. It’s a place where they commune with friends, including people they really know, and others they only known through social media. It’s a place where they gather information, meet new people and form relationships. Financial advisors who know how to navigate the digital world have an advantage of those who do not.

Financial advisors know that the only way they can ensure their sustainability and, ultimately, their success, is with a perpetually packed pipeline of prospects. They are also realizing that social media is an important tool for their businesses, and an important source of information about markets and investing. A vast majority of these people use social media to gather information, commune with groups, network, form new relationships, and evaluate financial advisors. For advisors targeting Millennials or Generation Y prospects, social media represents a way to establish relationship with groups that tend to bristle at the old way of prospecting, including cold calls, direct mail and even email drip campaigns are over.

Social Media Is For Everyone

But, it’s not just the younger generations lurking on social media.

  • According to Pew Research, more than 65% of adults ages 50 to 65 and nearly half over the age of 65, use some form of social media.
  • In that group, women, who will control more than half of the nation’s wealth by the year 2020, are online the most.
  • Another study by LinkedIn/Cogent Research revealed that more than 90% of high-net-worth investors use social media and five million investors with assets of $100,000 or more use social media to formulate or validate their financial decisions.
  • The study also showed that 52% of affluent investors say they would interact with financial advisors via social media, yet only 4% have been engaged by a financial advisor online.

You can expect the use of social media by the affluent and high-net-worth individuals to increase. That’s why a growing number of advisors are venturing into the use of social media to “more properly” engage with their markets and build relationships. Being able to communicate in the same manner in which their desired clientele communicates is essential to starting new relationships.

Today, the reach of social media extends beyond other means of persuasion, including multi-media advertising.  In this digital age, advisors have to consider how much influence they have over their target market. Or, more to the point, whether they are invisible to their target market.


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Elements of a Social Media Strategy

When wading into the social media pool, it’s important to remember that it’s not a place to conduct business. The purpose of social media is to engage with people in thoughtful ways, and to share information that helps the community. By doing this, you will expand your network and increase your visibility within target markets. To build a social media following, you must follow the proper etiquette which tends to vehemently ignore self promotion.

A good approach is to follow people or companies that interest you and then to listen and read what they are posting, and then share your thoughts and thus contribute to the online conversation. You want to be concise. You want to include links to information so people can read more deeply about whatever it is you have posted. The key with this approach is building trust and positioning yourself as a thoughtful person, and a resource who people will want to follow. Why would they follow you? To learn. To benefit from your perspective. Many people use social media to curate information. Everyone is bombarded with information, and social media allows people to tune in, and tune out, information.

Some of the more successful social advisors incorporate the following core components in their social media strategy:

  • An active blog. While your website is the hub of all your digital activity, a blog is a key component of your social media strategy. An active blog showcases your ideas, expertise and thought leadership through fresh and compelling content. It also becomes a gateway people will visit when it is linked to your social media sites, driving traffic between your social media sites and your website.
  • An active Twitter presence. Building a Twitter following is key to expanding your reach while engaging with your target market. With more than 300 million users, Twitter has the power to magnify your brand and drive traffic to your website and other social media sites. Of course, many people do not know where to start on Twitter, or even how to use the service. A good way is to simply follow people, or companies, that interest you. Look to see who they follow on Twitter, and follow them, too. Soon, you will build a network, and in time you will almost certainly find that the network is something that you use to sharpen your thinking, identify important information, and meet new people, some of whom will become trusted advisors and even friends. When you approach Twitter with that kind of spirit, you will almost certainly find that it carries professional benefits, too. 
  • Active engagement in two or more social media sites. LinkedIn is the most widely used social media site by financial advisors followed by Facebook, Instagram, YouTube, and Pinterest. Pick two and start engaging. Again, the key is to be thoughtful and informative. Start by identifying 10 ideas or themes that you want to share that are important to your clients, and potential clients, and that you think are not widely understood. Help to make them understood. Write as if you are explaining these ideas to your family. Stay away from any hype. Your sole goal is to share information and educate.

When fully implemented, your social media strategy can open up a range of new opportunities to grow your practice:

  • Networking at digital speed can put you in front of more of your “ideal client” types
  • You can expand your reach into your target market
  • You can generate more referrals
  • You can learn valuable information about your target market
  • You can increase your visibility and credibility within your market

Get in the Game

According to a survey by Putnam Investments, 86% of advisors who use social media gained new clients, and 60% say their social media strategy is more efficient than traditional networking. Of course, the real payoff of these online relationships is when they convert into the physical world. If done properly, meeting someone who you first met online is a lot like meeting an old friend for the first time. The online experience is just that powerful because it can truly create a meeting of minds.

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting-edge technology at StratiFi.

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