How to use social media in financial planning

Plenty of advisers have profiles across many of the most popular social platforms and use these to interact with their peers, existing clients and potential clients and, in some cases, the media.

Samuel Leach, director of Samuel and Co Trading, acknowledges: "Social media has transformed businesses' relationships with stakeholders and existing and potential customers.

"It empowers you to interact with them through a platform they are familiar with, and demonstrate a human side of the business, which ultimately leads to a greater sense of connection."

But finding your professional voice on platforms such as Twitter, LinkedIn, Facebook and Instagram can be tricky, particularly with the level of regulatory scrutiny in the industry.

Social media can be a useful tool for advisers as it provides another method of communication. Darren Smith

The evidence is this is not putting advisers off and that more are joining social networks to get their voice and their business heard.

A survey of US-based financial advisers by Putnam Investments reveals social media use is growing, with LinkedIn the site most used by this profession.

The 2016 research was conducted among 1,018 financial advisers from across the US who had been advising retail clients for two years or more.

While the findings are based on social media use by advisers in the US, it seems reasonable to assume a similar trend is occurring among UK advisers.

According to Putnam, 85 per cent of advisers are using social media for business, with LinkedIn the primary network for advisers, but used less frequently every month than Facebook and Twitter (see charts below).

LinkedIn is the primary network used for business and monthly frequency using social networks

Source: Putnam Investments, 'Advisers are social'

Darren Smith, head of the Financial Adviser School, explains: “Social media can be a useful tool for advisers as it provides another method of communication which works especially well with certain client segments. 

“It also allows advisers the opportunity to raise their profile, have a professional identity online, build relationships, and be visible as an expert.

“Indeed, research has shown that clients lean towards those who are like-minded to them. The savers and investors of tomorrow are very adept and in tune to social media and may look for that capability from their advisers,” he notes. 

How important is social media in helping to humanise the financial adviser?

Tom Hegarty, managing director at New Model Business Academy, thinks advisers should be using social media and not just because younger, potential clients are more likely to see them on there.

“When speaking to advisers about social media, I would say don’t be under any illusion that it’s only younger clients that use social media, it will also be older clients that are using social media,” he says. “And if they’re not currently using it, they will start using it because their children and grandchildren will be using it to communicate with them.”

What builds presence?

Which social platforms should advisers be using if they want to strengthen their online presence? 

It really depends on what the adviser firm or individual adviser wants to get out of it.

Bill McManus, director of strategic markets at Hartford Funds, suggests: “LinkedIn can be a valuable social media tool for advisers, if best practices are used, because it is a large social network that enables advisers to search using a variety of parameters. 

“LinkedIn users can filter their searches by common connections, geography, education, job title, and more, which makes it a great resource for prospecting.”

He continues: “Not only that, but LinkedIn can also help advisers position themselves as an influencer and expert, provided they maintain a professional profile and share compelling content on a regular basis.”

Mr Hegarty sees the benefits of all three of the most popular social media sites – Twitter, LinkedIn and Facebook.

“All of which we have had evidence from some of our firms that they do generate new clients, if that’s what the advice firm is looking for, and generate referrals,” he points out. 

What I use Twitter for now is to connect with people, like journalists, and to raise my profile. Claire Walsh

“But some advice firms aren’t actually looking for more clients because they’ve already met their capacity in terms of growth and the number of clients they can deal with. 

“So if they’re not looking to generate new clients, social media is another way to retain those existing clients but also ensure that they improve and increase the engagement levels with them as well and keeping them informed of what’s going on with their money, keeping them informed of topical areas they might want to discuss and even educating them as well.”

Putnam confirms, in its 2016 survey, that since it first started formally surveying social media use among advisers in 2013, “the percentage of those reporting success in gaining clients via social media has grown from 49 per cent to 80 per cent”.

One adviser with an online presence is Claire Walsh, chartered financial planner at Aspect 8 Financial Planning. 

Her Twitter profile which, at time of writing, has 2,221 followers, promises media commentary on financial advice, pensions and investments.

“What I use Twitter for now is to connect with people, like journalists, and to raise my profile, and just interacting with other people in the industry,” she says.

But she questions how effective it is at helping to generate new clients.

“I have got one client off Twitter, which was [in] the first week I joined, and I’ve not had anymore since then. I have had enquiries off Twitter but they’ve not led to anything. It’s a potential stream but not likely,” she admits.

Putnam’s ‘Advisers are social’ report found Facebook and Twitter are increasingly becoming marketing and learning tools.

Source: Putnam Investments, 'Advisors are social'

However, if advisers are going to start using or already do use social media, then they must ensure they are doing so responsibly.

In March 2015, the Financial Conduct Authority (FCA) issued guidelines on social media use.

In the document FG15/4: Social media and customer communications, the FCA states: “We recognise that social media are particularly powerful channels of communication and therefore of significant value to firms. We do not want to prevent their use. These media allow firms to contact their customers, and vice versa, both pre- and post-sale.”

It adds: “We remind firms that any form of communication (including through social media) is capable of being a financial promotion, depending on whether it includes an invitation or inducement to engage in financial activity. This could include, for example, ‘advergames’, where promotional messages are placed in entertainment applications.”

Mr Smith acknowledges that social media comes with its risks. “Clients and customers are now immersed in a world where products and services are widely discussed online which can influence them and the conversations advisers have with them,” he cautions. 

“It is very easy for clients to receive misleading or misinformed commentary which often makes it difficult for an adviser to correct their clients’ perception.”

Regardless of occupation, most users of social media would be wise to monitor what they put out on these types of platforms.

But how can advisers avoid the pitfalls?

Mr McManus suggests to start with, advisers should consult with their firm’s legal and compliance teams, if they have them, about social media policies and procedures.

His other recommendations are:

• Advisers should keep their profiles professional, using a business headshot for their profile picture and avoiding photos that are overly retouched, staged, blurry, or just a company logo.
• When using LinkedIn to prospect, we feel that it is too impersonal to use the introduction button. Prospects will want to know that you aren’t just sending stock invitations to everyone, so crafting a personal message will add a more human touch to your outreach.
• The final pitfall to avoid is don’t post excessively — stick to posting strong content a few times a week, and add some commentary to the posts to keep up the personalisation.

For Philip Hanley, director and independent financial adviser at Philip James Financial Services, the key to making the most of social media is to be yourself.

“Use social media if you enjoy using social media and can write interesting stuff,” he suggests.

“If it's done for you by a marketing person, it's pretty obvious. It may get you up the Google rankings, simply because you're putting stuff out, but won't say anything about your personality. 

“Do it if you can be consistent, get a message and have something to say.”

eleanor.duncan@ft.com