Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.
In Practice April 21, 2017
Benefits and Limits of Social Media Marketing
Advisers widely like to use social media to cultivate client
relationships—but they see limits on the value of social media interactions, with
the vast majority passing on premium social media marketing services.
Reported by John Manganaro
Nearly half of advisers (46%) have successfully turned a social media contact into a real customer, according to American Century Investments’ Seventh Annual Financial Professionals Social Media Adoption Study.
Most of the new deals reached were small, with 23% of all advisers saying they posted a deal via social media pathways valued at less than $1 million. Just 4% report winning a deal valued at more than $5 million for the business through social media connections.
A majority of advisers (55%) feel that being connected with an individual or company on a social media network increases the chance of doing business with that entity in the foreseeable future. Forty-three percent feel there is little impact, and just 2% suggest pre-existing social media connections make establishing a business relationship more difficult.
As advisers might expect, the research shows Facebook is more popular for personal use, while LinkedIn is more popular for business-related use. Interestingly, slightly more advisers (24%) report using Facebook for both personal and business purposes, compared with 21% who use LinkedIn that way.
Advisers cite a laundry list of benefits seen from embracing social media for business purposes, although generally only about one-quarter of advisers cites each of these: “Increased my visibility in the marketplace; enhanced my profile with clients; enhanced my business knowledge; improved my referrals or opened a door that otherwise had been closed; shared insights with clients and prospects; attracted new clients; and retained clients more easily.”
Firms cite ancillary benefits from social media engagement in the form of gaining better access to expert commentary/insights, viewing more news/content relevant to clients, and getting to know prospects in a more personal way. Important to note, however, 23% of firms say they are not seeing any positive business changes attributable to using social media.
The American Century Investments research goes on to suggest relatively few advisers feel compelled to invest in paid marketing services offered by Facebook, LinkedIn and other sources. A whopping 75% of advisers do not use such services, and another 5% are unsure to what extent their firm is paying for social media marketing.
An infographic summarizing key findings is available for download here.