Financial Advisers Increasingly Land Clients Through Social Media

Registered investment advisers are increasingly landing clients via social media marketing, according to recent research.

The number of advisers converting social media leads to clients continued to trend up in 2022 to 41% of those surveyed, a 1% increase from last year, but up from 34% since 2019, according to the fourth annual “Financial Advisor Marketing Trends” survey conducted by Broadridge Financial Solutions, Inc.

The leading platforms for client conversions are LinkedIn (67%), Facebook (54%) and Twitter (7%), according to the survey of 401 financial advisers conducted in September and October. The success of digital media tactics in gaining clients was a positive amid a rocky year for advisers, said Kevin Darlington, general manager and head of Broadridge Advisor Solutions, in a press release.

“It has been a challenging year for financial advisors, with many struggling to adapt to new compliance and regulatory guidelines, increased market volatility and ongoing hiring and talent retention challenges,” he said. “Digital media usage is a bright spot and continues to show upward-trending success, as advisors double down on digital strategies and maximize the use of websites, LinkedIn and Facebook to generate leads.”

The largest increases in marketing investments are expected on digital platforms such as websites and social media, as opposed to television or radio, Broadridge found. Meanwhile, many advisers plan to supplement the digital push with increased spending on in-person options, including events and word-of-mouth referral programs.

A trend toward digital marketing comes in part due to the pandemic’s influence, resulting in people spending more time on digital devices such as smartphones, says Rebecca Hourihan, founder and chief marketing officer of 401(k) Marketing.

“Prior to the pandemic, the average person spent 2 1/2 hours on their phone,” Hourihan says. “Now, we spend four hours a day staring at these little five-inch devices. Advisers need to be phone-first from a marketing perspective so that all of their content, whether plan sponsor-facing or employee-facing, is easily viewable by phone.”

Hourihan, who works with retirement plan advisers that include independent broker/dealers and registered investment advisers, says phone-based marketing is one of the big trends the industry will continue to see in 2023. Another area of marketing growth Hourihan has seen in her business is video, with advisers using the format in increasing number to post on social media.

“Advisers are really excited to be on video and are getting more comfortable with the platform,” says Hourihan, whose company offers standard scripts on various employer-facing topics that advisers can adjust to their own messages.

Spending Up, Satisfaction Down

The Broadridge survey found that average marketing-spend increased in 2022 to $17,433, up from $16,090 in 2021. But while more dollars were spent, the percentage of revenue allocated to marketing dropped to an average of 3.1% in 2022, compared to 3.6% in 2021, according to the New York-based consultant and financial technology provider.

Satisfaction with that marketing spend also declined, with 68% of advisers reporting they are either very satisfied or satisfied with their return on investing for marketing, as compared to 77% in 2021.

The Broadridge survey touted the importance of advisers having a defined marketing strategy to land clients. The firm found that advisers with a marketing plan are more likely to achieve better business outcomes than their counterparts without a strategy. When it came to social media spending, 57% of advisers with a defined marketing strategy converted a social media lead to a new client, compared to 36% of those without a strategy.

Hourihan, of San Diego-based 401(k) Marketing, says that, in general, advisers are not allocating enough budget to marketing. She says the 3% to 3.5% range of budget spend is nowhere near enough for success.

“In other industries, it’s expected that companies invest 10% to 15% in marketing,” Hourihan says. “Our industry is very low, so I encourage people to spend 5% or 6% and see what happens.”

Hourihan says every adviser must have a strong digital presence to meet the demands of the current market, as plan sponsors will shop around for the best adviser, looking them up on LinkedIn and other platforms.

“They’ll look to see: Does this person look competent?” Hourihan says. “If the answer is, ‘No,’ then they quickly leave, but if they see that the adviser has a great page, resources and talks about how they can solve problems for plan sponsors, then they’re likely going to be interested.”