Data & Research September 17, 2015

Social Advisers Continue Spiraling Up

More assets and new clients gained by using social media, and it’s not just LinkedIn.
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Social media use by advisers of all ages is skyrocketing, according to a survey from Putnam Investments. In this year’s findings, more than one-third of advisers (40%) use four or more networks for business, up from 25% last year. A growing number (69%) cite social media as playing a significant part in their marketing, a rise of 13 percentage points from last year. 

The median increase in assets gained through social media activity is $1.9 million, up from $1.2 million in 2014. Advisers look to different social platforms for different business-building functions: LinkedIn to improve their referral network and connect with other financial professionals; Facebook to enhance client relationships and build a professional brand; and Twitter to expand professional knowledge and help establish a thought leadership platform.

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While LinkedIn continues to be the dominant network for business use by advisers, business usage of other networks is growing more rapidly. Nearly three-quarters of advisers (70%) use LinkedIn, up from 64% in last year’s study. Nearly half use Twitter (42%) and Facebook (47%). Advisers increasingly get their business news and information from social sites, and they equate the sites’ credibility with that of traditional news sources.

If you’re wondering what the typical social adviser—one who has gained assets by using social media—looks like, Putnam says it is a male, with the following characteristics:

  • 44-year-old wirehouse adviser
  • Lives in the South or western part of the U.S.
  • Active on five social networks
  • Has 10 years of experience
  • Runs a book of business of $80 million (median)

Current social media use by financial advisers is broader, deeper and more results-driven, according to Mark McKenna, head of global marketing at Putnam Investments. “We are seeing advisers across the industry—including those affiliated with major wirehouses, independent firms and RIA shops—recognize the present and future potential of social media engagement with clients, prospects and other crucial constituents,” he says.” This is a medium that is evolving rapidly for advisers and offers tremendous promise for the years to come.”

Putnam’s research was conducted online in July by Brightwork Partners among 817 financial advisers nationally who have been advising retail clients for at least two years.

A link to an infographic with some of the study’s findings is on Putnam’s website.

Client Service September 17, 2015

Sandwich Generation Needs New Messages About Saving

Don’t just tell those stuck between obligations to aging parents and children they need to save more, tell them how.
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When members of Generation X who are also members of the ‘Sandwich Generation’—caring for aging parents and providing financial support to children or paying for college—are told they need to save more for their own retirement, they know that, but feel they can’t.

“How to prioritize all their financial goals is the number one question we get,” Joe Ready, head of Wells Fargo Institutional Retirement and Trust, said during a Financial Services Roundtable (FSR) event. “If we say, ‘Let’s get started on retirement,’ the number one objection is people can’t pay their day-to-day bills.”

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Brock Jolly, an adviser with Capital Financial Partners, said he is in the trenches every day with families, the majority of which are in the Sandwich Generation. “People are living longer. How do you pay for that? How do you pay for college when it has gotten so expensive? People are starving for advice and help.”

“The pressures to pay for children’s college, save for retirement and take care of aging parents are not mutually exclusive. They are all related to each other,” Congressman Peter Roskam (R-Illinois) said during opening remarks at the event. “Good work can be done holistically.” However, Roskam expressed concern that tax reform could set retirement savings back, and the Department of Labor (DOL) fiduciary rule could keep those who have knowledge from sharing it with those who need it.

NEXT: Real help for the Sandwich Generation

Ready shared that when Wells Fargo asked 40- to 49-year-olds what is the number one thing they worry about with regard to savings, the majority said saving and paying for college and caring for aging parents. When those in their 50s were asked the same question, the majority said saving for retirement. “But, by that age, they have lost the value of time for their savings,” he noted. Fifty percent of individuals in their 50s said they plan to work until age 80. “But will they have the physical or mental capacity to do that? What they say and what actually occurs is different,” he added.

Savings is the number one factor in how people are going to support themselves in retirement, Ready said. Those who feel they can’t save or can’t save more should look at their budget. “Looking at where they are spending money can be an eye-opener; it can show them small ways they can get started,” he stated.

It also helps to give people a target retirement savings level they should aim for, and to show them how on track or not they are for achieving the target, according to Ready. “It helps individuals develop a strategy.”

Developing strategies for saving is important, agreed Jolly. For example, individuals often hear about the miracle of compound interest, but not about the nightmare of compound tax. “If you save well, you may also pay a lot in taxes, and people don’t realize that if they take money out of an employer-sponsored retirement plan to pay for college, they will pay taxes twice—they pay back the loan with after-tax dollars then when they withdraw from the plan, they pay taxes on those after-tax dollars,” he said.

NEXT: Saving for college and caring for parents

Saving for college is also about strategies, not just buying products, Jolly added. “For example, what if an individual saved well for her child’s college education, but her child graduated high school and started attending college during the 2008/2009 recession?” he queried. “People don’t know the right strategy to use, and need help.”

In addition, Ready noted, there are several ways to fund an education. Employers and advisers can share information about alternative ways to pay. “You can’t borrow money for retirement,” he said.

When it comes to caring for aging parents, Rhonda Richards, senior legislative representative for AARP, says AARP encourages people to have conversations within their families—to know the parents’ wishes, the parents’ financial situation and how all family members can help. AARP has a guide to help with care planning.

Individuals may want to purchase private long-term care insurance. Richards said individuals can deduct premium payments as medical expense deductions on their taxes, and there are tax-qualified polices for which individuals are not accountable for tax purposes. She suggested employees talk to their employers about what options there are within employer benefit offerings.

It’s good to get advice, but those who don’t have access to an adviser or feel they can’t afford to have one can find many calculators online about how much to save, long-term health care costs, and other things, Richards said.

The event, “The Squeeze on Gen X, The Sandwich Generation,” was part of FSR’s series of events highlighting the “Save 10” initiative, which is a business to business, peer to peer effort encouraging employers to help their employers save 10% of their income for retirement.

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