A financial planner’s guide to social media

To understand the role of social media in financial planning, advisers should look at the fundamental drivers of success in their industry. Social media is not a new concept, writes Zurich's Marc Fabris.

Founder of IBM Thomas Watson is reputed to have said in the 1940s “there is a world market for maybe five computers”.

I was reminded of this quote the other day when I heard a trend forecaster claim social media was a ‘fad’, which had ‘probably peaked’.

It occurred to me then that most of the commentary in the industry about social media – and there is a lot – really misses the point, focusing on the media rather than the message.

As a whole, the financial services industry has lagged in incorporating new media into their communication mixes – which is surprising, given the pace at which customers have adopted it – and the possibilities opened up to access and share information in real time.

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Our research shows that financial advisers too have been slow to embrace social media, despite the proliferation of platforms such as smart phones and the iPad, which make it more accessible and intuitive.

It’s obvious that the many types of social media have an image problem, predominantly because of the label ‘social’.

Comments like these are common from advisers:“Facebook and Twitter are a waste of time.”

“A whole bunch of teenagers that have nothing better to do than to exchange rubbish with each other.”

Because tech savvy youngsters have been quicker to adopt these media, generally for purely personal purposes, it has made it easy to write off social media as a powerful business tool.

Perception is everything.

The humble telephone in the hands of a teenager talking to their friend for an hour is clearly a social medium. And yet no-one denies that the telephone is one of the most powerful business tools ever invented.

To shift perceptions about the role for social media in everyday adviser practices, we should reframe the conversation back to the fundamental drivers of success in our industry – drivers which have changed little in decades.

Consider now some of the ways most financial advisers go about running their practices:

• They use the phone and email for communicating with clients, prospects and colleagues.
• They network at conferences, events, and coffee meetings.
• They send their clients regular newsletters.
• They seek and make referrals and promote client testimonials; and
• They seek ways to establish themselves as a subject matter expert in their field, by writing articles or seeking opportunities to be interviewed by the local paper or radio station.

Imagine if we were to say to an adviser that there is now a way you can do all of this better, and faster, with more people, and with less effort. Most advisers would, quite sensibly, jump at the opportunity. 

And yet despite this being achievable – by tapping into the many types of new media (bearing in mind that Facebook, Twitter, LinkedIn and YouTube are literally only the tip of the iceberg) – most have not yet seen the light.

At the risk of using a hackneyed phrase, we should consider the ‘new paradigm’ of successfully connecting with clients, colleagues, and business partners and look beyond the ‘social’ aspects of this media to maximise how we communicate.

Do financial advisers have the means to access these new media?

Most have a computer, and according to our research nearly 80 per cent have a smart phone, and over 35 per cent are already equipped with iPads and other tablets (compared to 9.4 per cent at the start of 2011).

These numbers alone suggest that advisers see the possibilities that social media has to offer, so what’s next?

If you have a smart phone (iPhone or Samsung Galaxy), start by downloading the Twitter application and become a ‘passive user’.

By that I mean start as a ‘follower’ only, following some of the key news outlets, your favourite sports team, and any friends or colleagues already on Twitter.

Then go to LinkedIn and set up your own profile, have a look around and see if any of your colleagues are already on there.

Invite them to become a ‘connection’.

As you become more familiar, you’ll start to use more functions and before you know it, it will become a normal way of conducting your business.

Then ultimately, the term ‘social media’ should disappear altogether.

Not sure where to start your social networking? You can join Money Management on Facebook, Twitter, Google+ and LinkedIn.

Marc Fabris is the national manager of sales strategies and research, life risk at Zurich.

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