A new study has found that many financial advi-sors are already using online social media sites to generate business — whether their employers like it or not.

And it’s not hard to spot the reason. The survey, conducted in June by Texas-based Socialware Inc. , found that a hefty percentage of advisors using social media in North America are seeing measurable improvements in both their prospects and client base.

Entitled Advisor Survey: An Examination of Social Media Use By Financial Advisor’s across North America, the ensuing report states that 60% of 196 financial advi-sors across the U.S. and Canada who answered 30 questions about their use of social media use sites such as Facebook, LinkedIn and Twitter for business purposes.

About 50% of those using online media reported that they have new referrals as a result of online networking. About 33% of those referrals have led to new clients, with the average number of referrals gained from online networking ranging from one to five clients.

Bringing some order to the hype around social media was the survey’s main goal, says Chad Bockius, CEO of Socialware: “Advisors wanted to see if there was a definite payoff from using these tools. They wanted to see actual numbers from people in this industry.”

Because using social media is free, Bockius notes, the study proves there is almost always a silver lining when using social networks: “Basically, it’s a free channel of marketing. It only takes gaining one customer to make the time an advisor spends on a site worthwhile.”

Slightly more than half of the advisors in the survey had more than 100 clients. About 44% of the 118 advisors in the survey who were using social media had an average account size of US$300,000 or more per client. Most advisors using social media were between the ages of 36 and 45 and used these sites for about 28 minutes a week.

Perhaps even more interesting is the lack of negative feedback from clients, a concern of many companies that employ advisors. Of the respondents using social media, not one claims that using these sites has led to a negative effect on their business. The majority (60%) said it had a neutral impact. The remainder of advisors were either positive (33%) or very positive (7%).

One advisor said social media has changed his entire client landscape: “I have clients all over the world, two-thirds of which I have never met before. Facebook lets me know them, their faces, their hobbies. LinkedIn tells me boatloads about prospects before I even meet them.”

These findings show that advisors are growing more comfortable with using these sites for business, says Peter Tzanetakis, vice president of regulatory and public affairs with Toronto-based Advocis: “If 100% of respondents [that use social media] have stated that social media has a positive or neutral effect on their reputation, that is telling us that advisors are certainly taking social media seriously and looking at it. Whether they will implement a social media strategy is another topic.”

As for the number of social networks that advisors sign up for, two appears to be the magic number. Of the Big Three sites, LinkedIn is the most popular among advisors for business: perhaps that’s because it is also the least likely to be banned by employers, with only 20% of firms outlawing its use. Facebook was the next most popular, with 40% of respondents planning to use it.

Social media is also being used by advisors in a way that has so far received little attention — connecting with other advisors. Says Tzanetakis: “They are in the business of sharing information with each other, and social media is a way of achieving of that.”

Of course, several roadblocks to the full and free use of social media by advisors remain, with the chief issue being regulatory compliance. Of the respondents using social media, 39% do so in defiance of their firm’s policy. And 43% are unaware if their firm even has a social media policy.

Says Tzanetakis: “It speaks to the value that these sites are offering, that advisors are willing to use them, even though firms have banned it.” IE