In recent years, a growing number of financial advisors have begun using social media sites such as LinkedIn, Twitter and Facebook both personally and professionally.
According to a new InvestmentNews survey, three quarters of advisors now use social media in some capacity, while a May 2012 study by FTI Consulting and LinkedIn found that 7 in 10 financial advisers use social networks for business purposes.
But social media is still a new frontier for financial advisors. Many are still figuring out how to use social media sites and some are wary of jumping on the social bandwagon due to compliance concerns or a simple lack of time.
To learn best practices for advisors and how social media may be changing the advisor-client relationship, I recently sat down with Cathy Curtis, founder of Curtis Financial Planning, an Oakland, Calif., firm specializing in the finances of women. Ms. Curtis, an early adopter of social media, has her own blog; a presence on LinkedIn, Twitter and Facebook; and is often cited in the media and on panels as an expert on the topic of advisors and social media.
Here are excerpts of our conversation.
Q: How do you use the various social media sites?
A: LinkedIn, for me, is like my resume online. I have a very detailed profile there that I use for connecting with and meeting new people, especially potential clients. I have Linkedin experts review it periodically to make sure it accurately targets clients. On Facebook, I have a page for my business and it’s a great way to broadcast who I am, what I’m writing on my blog and where I’m speaking. And Twitter is great for connecting with target clients, peers and thought leaders in the financial industry and for broadcasting my message – it’s where I try to become a personal finance thought leader through posting links to relevant news articles and to my own blog posts, and retweeting interesting content.
I started my blog so that I could share more of my own content on the Internet and social media sites and consequently increase awareness about my personal brand as a financial advisor specializing in women’s financial issues. Ultimately, however, my strategy is to use social media sites to attract potential clients to my Web site (my blog exists on my site) where they can learn even more about me and contact me directly.
Q: What challenges have you run into using social media?
A: Compliance isn’t the challenge for me. As an independent advisor, I’m lucky that I’m my own chief compliance offer and I’ve learned enough about the rules to know what regulators are looking for. I’m not investment or product focused in my content so that makes it easier to be on the right side of the line.
The challenge for me is always how much time being active in social media requires. A lot of people think being active on social media just involves putting up a profile and then people will come to you. In reality, it’s all about creating a personal brand and that takes a lot of time. You have to have a consistent presence on social media sites and schedule time for your updates or you might as well not be on the sites. If you’re not updating your pages consistently, people will lose interest in you and you will have wasted effort getting started.
I justify the time I spend by thinking of it as my marketing approach – you need to do marketing and this is a very cost effective method. That said, I’ve overcome the time challenge by outsourcing and using posting tools. I hired a marketing firm to help edit my blog posts and promote them online and to produce a newsletter that compiles my content quarterly. And while I wouldn’t outsource my Tweets since Twitter is too real time and would seem inauthentic, I use tools like TweetDeck to help me there. I now spend much less time on social media sites daily than I used to thanks to these methods.
Q: How has your use of social media changed your relationship with clients, if at all?
A: I find that social media is a better client acquisition tool than a client communication tool. Because of my social media activities and content, my Google ranking is super high and it’s easy for people to find me online. Once people find me on the Internet, whether on my site or on a social media site, they get to know me as an advisor and if they like what I’m doing, they contact me.
I now get most of my clients through the Internet and about 10% contact me specifically through social media sites. But after the client hires me, I communicate with individual clients the usual old ways — via email, in person or over the phone.
Q: Why do you think social media hasn’t changed the advisor-client relationship after client acquisition?
A: Because of the very nature of the client-advisor relationship – it is very private. Social media isn’t the place to discuss personal financial matters. Once someone hires me, the relationship is developed the old-fashioned way. That’s not to say my client’s aren’t reading my blog posts or newsletter or seeing my posts on Twitter or Facebook– many do, and social media is a great way to have multiple points of contacts with clients who are active online.
Q: So how would you recommend consumers use social media to find an advisor?
A: They should first figure out what kind of advisor they want and then do a search with the help of sites like LinkedIn and Google. On LinkedIn, they can type in “fee-only advisor” or whatever they are looking for and see who comes up. Then on Google, they can search for advisors’ presence on other social media sites and get a sense of what kind of topics an advisor focuses on in online content and speaking engagements.
BlackRock is not affiliated with Curtis Financial Planning.