U.S. financial advisors are stepping up their use of social media, and garnering clients as a result, according to a new survey from Putnam Investments.
The firm released the results of its latest survey examining the social media practices of over 700 financial advisors across the United States, which found that advisors are using social media more than they were a year ago, and that they are generating business as a result. It reports that 66% of advisors that are using social media for business say it has helped them gain new clients, up from 49% in last year’s edition of the research. Additionally, the survey found that advisors acquiring clients through social media are adding a median of almost $2 million in new assets as a result; which is almost triple the level of last year’s respondents.
“We’re seeing a remarkably rapid and dynamic evolution of social media use as advisors test ways to make this work for their practices,” says Mark McKenna, head of global marketing at Putnam Investments. “A year ago, the focus was almost entirely on business content and professional networking. Increasingly, advisors are leveraging the more personal side of social media and getting results.”
The survey found that LinkedIn remains the number one site for advisors, used as a primary network by 55% of respondents, but that the use of Facebook is up sharply year-over-year to 24%; and, the usage of Google+ and Twitter is also on the rise, it says. However, these networks are used differently. The survey says that advisors typically use LinkedIn to connect with other advisors, whereas they use Facebook to connect with clients, it notes. The share of advisors using only one network for business is down from 33% to 25%, the survey found; and, the proportion using four or more networks has more than doubled from 11% to 25%.
The firm reports that the typical financial advisor who currently uses social media is 46 years old, working for a wirehouse firm in the southern or western U.S., with 11 years of experience in the industry. Their average book is $84 million, with median client assets of $900,000.
The survey also notes that female advisors are leading the use of social media. It says that women are more likely than men to use social networks for business (82% vs. 73%); and that, over the past year, the proportion of female advisors using social media for business has doubled to 29%. They are also more likely than male advisors to say that social media plays a significant role in their practice marketing efforts (67% vs. 52%). Women are also likelier to obtain new clients through social media (71% vs. 64%); although, the survey found that the median increase in assets for male and female advisors is about the same.
“The emerging demographic patterns among advisors on social media are really surprising to us,” notes McKenna. “While the research has clearly indicated that social media use is concentrated among advisors under age 50, especially those under age 30, this is the first evidence we have seen that female advisors are more deeply engaged in social media practices than men.”
The growth in the use of social media by advisors may be tailing off, the survey also notes. It found that, among those that are not active on social media, only 16% are “absolutely certain or very likely” to start in the next three years, and only 21% more are “somewhat likely” to do so. It says that advisors not using social media for overwhelmingly cite compliance concerns as the main reason.
The research was conducted online by Brightwork Partners LLC in the third quarter. It involved 729 advisors nationally who have been advising retail clients for at least two years.