The results of this year’s brokerage Report Card reveal that while the effective use of social media to build relationships with clients is not a primary concern for most advisors surveyed, there is increased awareness by their firms about the tool’s potential long-term benefits.

Two short years ago, most firms would have scoffed at even the suggestion that social media had a viable place within the financial services industry. Then, the Toronto-based Investment Industry Regulatory Organization of Canada released its draft guidelines for investment dealers’ use of social media in early 2011 and followed that up with the finalized version of its guidelines in December. As a result, virtually all brokerages are starting to look at ways to help their advisors incorporate basic social media practices into their businesses.

One of the firms leading the pack in the adoption of social media is Toronto-based Macquarie Private Wealth Inc. This firm was one of the first movers in the area, having established an in-house social media committee in January 2011.

“It’s one thing to talk about it; it’s another thing to do it,” says Earl Evans, Macquarie’s CEO and head. “We think technology plays a huge part in the business. And the No. 1 thing that can be a firm’s biggest strength or weakness is communication.”

Macquarie has developed what many in the financial services industry consider to be the gold standard for social media platforms. The firm has developed a one-stop hub on which an advisor can choose pre-approved links to news items that can be disseminated to clients via the advisor’s social media page. This prevents advisors, Evans says, from “going through 10 compliance officers.”

Says a Macquarie advisor in Quebec: “[The hub] allows advisors to communicate better with clients and to generate buzz for events. It’s a real focus [for the firm].”

Other firms are working on figuring out how some of the more popular social media websites – Facebook, Twitter and LinkedIn – can best be incorporated to help advisors interact with their clients.

“It’s key for us to be able to support our advisors in getting access and using social media in the proper way to interact with clients,” says Hamish Angus, managing director and head of Toronto-based ScotiaMcLeod Inc. “We want to create the policy that helps educate the advisors on what they can and can’t do, what options are available and, really, how to take advantage of the various social media [websites].”

Meanwhile, research by Toronto-based RBC Dominion Securities Inc. reveals that only about 6% of DS clients want to hear from their advisors via social media, says David Agnew, CEO and national director. Still, he adds, that’s something that’s going to change in the years ahead: “An average client is over the age of 50 today. But we know that the clients of tomorrow are going to become much younger and more savvy in this area.”

An advisor in British Columbia with Vancouver-based Canaccord Wealth Management shares that sentiment: “Younger investors are using it, so the firm needs to step up.”

That message is not falling on deaf ears. Canaccord’s management is in the process of devising a strategy in which advisors will be able to incorporate social media in connecting with their clients.

“We’re looking at making Facebook, LinkedIn, Twitter and Google+ available to advisors,” says Tanya Bird McCann, chief operating officer of Canaccord Wealth Management in Toronto. “Now that IIROC has published its requirements, we are well into an initiative that will take significant steps to integrate social media into the way we do business.”

Other firms are taking a completely different approach by developing their own internal social networks as a way for advisors to share ideas with their colleagues. Toronto-based TD Waterhouse Private Investment Advice, for example, has built an internal social platform through which advisors can “follow” each other and set up communities through which they can share information about what’s happening within the firm.

Still, despite the steps that these brokerage firms are taking to get advisors into the world of social media, one firm in this year’s survey is shying away from venturing into social media altogether.

“[There won’t be a social media strategy] as long as I’m around,” says Robert Harrison, president and CEO of Calgary-based Leede Financial Markets Inc. “I don’t want to spend my time doing it.”

That strategy suits one Leede advisor in B.C. just fine: “We don’t have a Facebook or Twitter presence. And it doesn’t matter to me because I like to build a relationship with a client and I don’t like to do mass marketing. I also prefer to be discreet.”

That message is echoed by some high-producing, veteran advisors at other firms who disregard social media’s potential advantages.

“It is a terrible idea to mix professional and personal like that,” says an advisor with TD Waterhouse in Ontario.

“It is supposed to be important, but I don’t care,” adds a colleague in Ontario. “I like my dinosaur shell.”

For some, it seems, old habits die hard, even if social media is here to stay.IE

© 2012 Investment Executive. All rights reserved.