InvestmentsApr 22 2014

Tech Report: How advisers use social media

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While the UK financial services industry is increasingly taking social media seriously and cautiously entering the ‘social’ fray, some advisers already have several years of social media trial-and-error experience under their belts, although their approaches to social media vary dramatically.

Advisers seem to be split into prolific social media darlings – notably the same advisers comfortable being media spokespeople – and the advisers who are sceptical about the perceived benefits and reticent to risk the potential wrath of the regulator. Some prefer to use it as an inbound information channel and open-source peer community, where they can pose business queries, source fresh perspectives on client conundrums and receive industry-specific breaking news.

David Gibson, director of Gibson Financial Planning (Twitter handle @DavidGibsonCFP), isn’t alone in reserving social media for peer-to-peer networking, although customer review sites such as VouchedFor.co.uk “definitely helps” inform the ‘customer journey’ of a new potential client, he says.

Mr Gibson adds: “I don’t use social media for client contact at all. I’m open to it, but of my, say, 1,000 Twitter followers maybe two are clients. I think other advisers would probably say the same thing: that [social media] tends to be for interacting with their peers and keeping abreast of trends and changes to legislation.”

While social media is ostensibly about two-way communication, Mr Gibson touched on a further benefit: social media accounts, review websites and business directories all contribute to search engine optimisation (SEO) – getting your brand or name listed higher in online search results.

Depending on which surveys you look at, 60-90 per cent of Britons undertake internet research before making a purchase decision.

“Very few people would ever just happen to stop by the office just because they’ve made a spur-of-the-moment decision. It’s usually after a fair bit of internet research on different advisory firms,” Mr Gibson adds.

Fewer advisers seem confident using social media to communicate directly with clients or as a means of reaching potential clients, although those that do claim a higher return on their (resource) investment.

Martin Bamford, managing director of Informed Choice (@MartinBamford), does use social media to source new clients and says “using social media has made a direct contribution to our bottom line, introducing us to some of our most valuable clients over the past five years”.

He continues: “It quickly became an important part of our marketing mix. Roughly a third of our new clients come directly from the internet and various forms of social media, but nearly all of them have at least checked out our website or social media profiles before getting in touch for the first time.”

The biggest pitfall advisers suffer, Mr Bamford says, is having an unclear message, being inconsistent in their social media use and failing to create original content of value to their audience.

He explains: “Simply sharing messages and news from others does little to build your reputation as an expert. I try to share a range of content. Each day I try to write at least two original blog [posts]. As a keen photographer I also share photographs and more recently video content. Finally, I like to share links to news stories or online discussions that I think might be of interest to my followers.”

Anna Lawlor is director of Social i Media

Social Media 101

What is social media?

Social media is about interaction in virtual communities and networks. It is a combination of online tools used to communicate with, about, and to our peers. In short: social interaction online. Based on US research data, more than three-quarters of financial advisers use social media.

Where are the advisers on social media?

Twitter is favoured (anecdotally and according to research reports available) followed by LinkedIn, Facebook and Google+. Some advisers, such as Mike Robertson Associates, make use of YouTube.

However, the social media universe is vast and encompasses social sharing (Instagram, SlideShare), publishing (WordPress, Blogger), broadcasting (podcasts, Vine, Vimeo), microblogging (Twitter), social network apps (TwitPic), video conferencing (Skype, Google Hangouts), geo-location (FourSquare, Facebook Check In) and more. There are also social media management tools such as HootSuite, TweetDeck, SproutSocial and Sendible to help you publish across the different networks.

Is it about marketing – or procrastinating?

Social media is as business-minded as the way the platforms are used and the strategy of the user. Social media differs from traditional marketing in that it facilitates a two-way conversation rather than a one-way promotion or sales push.

For advisers not yet ready to actively partake, social listening – such as collating and reading publicly available social media posts – can be a good way to dip a toe in the social media pool.

What does the FCA say about social media?

The FCA’s financial promotion rules (COBS 4, BCOBS 2 and MCOB 3) are the same regardless of the media – whether it’s a local newspaper advertisement, a blog or social media post – and regardless of the medium, be it text, image, video or audio.

A communication that merely informs or educates will not normally be considered a financial promotion but must always be fair, clear and not misleading.

Typical concerns advisers have about using social media

• My existing clients are not on social media

• I don’t believe there’s a way to partake in social media compliantly

• Facebook, Twitter etc are probably fleeting; I don’t want to waste time

• I’m sceptical of the return on investment

• I don’t get Tweeting; I don’t want to get it

Source: comment feeds on social media stories