A Financial Advisor’s Social Survival

Editor’s note: We love talking to our customers and hearing how they use social media in business. The tips, techniques and success stories empower all of us to continue improving our social citizenship and getting connected to those we serve every day. Here is Henry Becker’s perspective on why social matters to his business. Henry runs Becker Advisory Services, a Maryland based Registered Investment Advisor (RIA). He is also the editor of the OccamsPlanner.com blog. He most recently joined Arkovi partner Wired Advisor as a business development specialist. You can follow Henry on Twitter at @BeckerAdvisory or Facebook at Becker Advisory Services.

A Financial Advisor’s Social Survival

As a financial advisor, I look at social media very much like anything else I do. Every decision I make is, more than likely, linked to some regulation or rule.  That does not need to prevent me from doing my job. The compliance storm that is swirling about the use of social media appears to be holding back some advisors from using it in their practice.

Responsible use
Just because there are not clearly defined rules does not mean one should either be afraid of or avoid social media. My approach is to utilize social media responsibly just as I would any other type of communication or advertising.

In my view, social media should be an important component to every advisor’s communications and marketing plan. What follows is my logic in regard to one aspect of social media’s usefulness to advisors – client attrition.

My client base is pretty typical of most other advisors with an average client age over 50. What do we know of this demographic?

  • Over the next 10-15 years we will see the largest shift in wealth from one generation to the next
  • Recent studies show that a large concern of many aged 50-69 years old is the financial acumen of succeeding generations.
  • The generation that will be gathering from this wealth shift are regular social media users
  • The fastest growing segment of Facebook in 2010 was the 35-54 crowd

So, not only is your client demographic becoming more interested in social media but their heirs, who need guidance too, are already are fully engaged on social networks.

One advisor’s approach
My use of social media is to demonstrate thought leadership as an advisor and also to connect with clients and their children. It is no secret that many advisors have difficulty connecting with the younger generations, as the younger generation’s approach to money is very different from their parents.

Part of my marketing approach with social media is to establish a connection with my client’s family members. Some day your clients’ assets will flow via inheritance and the beneficiaries will either be looking for or have connected with advisors. The odds are good that the connection can occur on social media. Why not you? To answer the following question with “Because of compliance” may be a shortsighted response.

Tips from the front line
Here are a few tips for those kicking around starting a presence in social media:

  • If you are also a registered representative, make sure you are cleared for social media use
  • Be sure to have a clear social media policy for your business and set a good example for your team in its governance
  • Be sure to have a social media archiving system
  • Use common sense: if you think something is questionable don’t do it
  • Keep it simple and avoid specific investment recommendations
  • Use disclaimers

The advisors that are embracing social media will have that much more experience and advantage than those who come to the party too late. Get in there and be sure to use your common sense.

Editor’s Postscript: If you are exploring the use of social media and wrestling with best practices for your social media policy – be sure to contact Arkovi about our Social Media Policy Framework.

2 thoughts on “A Financial Advisor’s Social Survival

  1. Great post especially touching on the importance of succession planning and the demographic shift and transfer of wealth our industry will see in the next 20-30 years. Advisors positioned to connect with clients, prospects and their families will have an easier time maintaining a healthy book of business as the next generation inherits the wealth.

    In this space there is a first mover advantage and knowing how to connect and engage early will make it easier down the road.

    Victor Gaxiola

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