Are you getting the most out of your social media efforts? Without a strategy in place to make the most of LinkedIn, Twitter, Facebook, and other powerful social media platforms, advisors risk missing a sizable opportunity to grow and strengthen their practice: Consider that fully 70% of investors have made decisions about investments or their advisor relationships as a result of using social media.1

Used wisely, social media can help an advisor deepen existing relationships with clients and build new relationships with prospective clients. A successful social media strategy can also help differentiate an advisor from his or her peers. But advisors tapping into social networks must take care to avoid the potential pitfalls that come with the ability to spread a message to thousands—or even millions—of people with one mouse click.

WealthManagement.com conducted virtual focus group meetings with 10 advisors who have successfully integrated social media platforms into their practice. We sought to learn the best methods to embrace—and the worst mistakes to avoid—in order to leverage these powerful tools.

The value of social media

Many advisors already use social media to build stronger relationships with existing clients and to begin building relationships with prospective clients. A recent Accenture survey noted that nearly one in two advisors uses social media on a daily basis to reach out to his or her clients.2

INSIDE: The value of social media | Choosing the right platform | Make the most out of your social media efforts

EMBRACING THE SOCIAL NETWORK

What the social media experts do differently, and

how you can apply these principles to your practice

PRO TIP

“ I remember a financial advisor who used to go to networking functions. You’d ask him how it went the next day and he’d get upset, saying it was a waste of time. I think social media can yield the same result if you’re not careful. If you post up on Facebook twice and expect the world to follow you, you might as well not do it at all.”

Bill Winterberg, Founder, FPPad.com

Advisors use social media channels such as LinkedIn, Twitter, Facebook, and blogs to communicate directly to a target audience. These advisors know that communication is critical for strengthening relationships with clients. A recent survey of high-net-worth investors noted that nearly half of respondents listed poor communication as a reason to leave their current advisor.3 Advisors fluent in the art of social media know that such platforms offer an efficient and effective way to reach clients and prospects. “With social media, there is zero excuse for lack of communication,” says Jamie Cox, managing partner with Harris Financial Group.

Social media enables advisors to communicate instantaneously with a geographically diverse audience, effectively amplifying their message to reach a much wider population of prospective clients than previously possible. Consequently, advisors can expand the scope of their practice to include clients both down the street and several time zones—or even continents—away. “At a traditional networking event, maybe I walk away with two or three different business cards of people I might someday do business with,” says Michael Kitces, partner and director of research for Pinnacle Advisory Group, and publisher of the financial planning industry blog “Nerd’s Eye View.” “With social media, I can reach thousands of people at once with one tweet.”

Effective use of social media can also open doors to certain demographics. For instance, nearly 90% of internet users between the ages of 18 and 29 use social media on a regular basis, as do 78% of internet users between 30 and 49.4 And it’s not just Generations X and Y that use social media. Social media use by Baby Boomers has surged in recent years, with 60% of internet users between the ages

SOCIAL MEDIA MISTAKES TO AVOIDThe rules of social media aren’t so different from the rules of being social in real life. That said, consider the following pitfalls to avoid when building your social media plan.

� No original content. “Those who think that repurposed content is social media marketing will find themselves lost in the weeds of the very content he or she repurposes,” notes Jamie Cox. In other words, don’t just pass along links to your followers. Use your voice and tell your network why you want them to read that link, or your most recent blog post.

� Poor execution. Many advisors spend too much time focusing on which tools to use—whether content marketing software or a social media platform—without planning how they want to use these tools to build their business. Instead, slow down and come up with a plan for what you want these tools to help you accomplish.

Do you want to target a new niche of clients? Strengthen your relationships with existing clients? “I’ve seen advisors pay for all of these expensive tools and have no system, no process, and no strategy in place,” says Stephanie Sammons, founder and CEO of Wired Advisor. “It’s a real problem.”

� Delegating social media duties. It may be tempting to hand the reins of your firm’s LinkedIn or Twitter account to a younger or less-experienced associate, but experts say that’s exactly the wrong move. “Would you ever delegate your operations staff to go to a networking meeting on your behalf where they’ll go meet attorneys and accountants?” asks Michael Kitces, partner and director of research for Pinnacle Advisory Group. “Of course not. You can’t try to be social with people while delegating the ‘being social’ part to someone who isn’t you.”

The percentage of Baby Boomers that are active on social media5

60%

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of 50 and 64 active on social media,5 and even older clients increasingly use Facebook to stay in touch. “Don’t discount how many seniors own iPads and use them to be active on some social media platform,” cautions Kitces.

Advisors with effective social media strategies have found that these platforms offer a new and compelling way to brand their expertise and services. That’s useful as more prospective clients of all ages begin the advisor-vetting process by scoping out his or her online and social media presence. “We may get a referral from someone, or someone may refer us, but the first thing that they’re going to do, no matter what their age, is to look at us on Google or LinkedIn, make sure that we’re essentially who we say we are, and then maybe follow us for a little bit,” says Jeffrey Kitzberger, founding partner of Olympus Wealth Partners, Inc.

ARE YOU USING THE RIGHT PLATFORM?Increasingly, clients are passing over advisors who don’t have a clear online presence. “People start to wonder, ‘Wow, you don’t even have a LinkedIn page? How much of a professional can you be?’” says Kitces.

That said, simply having an online presence isn’t enough. It’s critical to select the right platform and leverage it effectively. Each platform offers different tools and capabilities, and advisors may gravitate to one platform or another based on the goals of their social media strategy.

For example, panelists in our virtual discussions noted that LinkedIn can be a powerful tool for publicizing an advisor’s name and practice, and for broadcasting original content to followers and connections. However, it’s used less actively than other social media sites, so it may not help the advisor interact with people in his or her network as effectively as, say, Twitter or Facebook.

Consider how some social media–savvy advisors use these popular platforms:

LinkedIn. Many advisors use LinkedIn to post a virtual resume. But the pros say there’s much more to this social media platform. Jamie Cox uses LinkedIn’s messaging service, InMail, to reach prospects in

the vertical market he serves, and also participates in LinkedIn Groups for current workers and retirees in his target markets. In those groups, Cox can post updates about anything from company benefits to union negotiations. Jeffrey Kitzberger uses LinkedIn as a sort of virtual networking event to promote his expertise as an advisor: “If I meet someone, I instantly go into LinkedIn and try to make a connection,” he says. “For me, it’s all about making contact, helping people, and getting my name out there.”

Twitter. Michael Kitces says he’s gotten the most bang for his social media buck from Twitter. He notes that it takes effort to make connections on Twitter, but that those connections can yield sizable

dividends, including more signups to his mailing and content distribution lists. Carolyn McClanahan, president of advisory firm Life Planning Partners, Inc., uses Twitter in part to help drive traffic to her blog posts for Forbes. She agrees

PRO TIPS

“ An advisor in my area is a perfect example of what not to do on Twitter. This account regurgitates the same blog articles over and over again, and never responds—no interaction. Instead, take the time to learn each medium beforehand.”

Blair duQuesnay, Director of Investments, ThirtyNorth Investments, LLC

“ People use LinkedIn as a resume. But that’s a huge mistake—nobody cares if you’ve been doing this for 21 years and have 4 degrees. If you want consumers to take action, you need to get much more descriptive: You need to use videos, or use links to get people to want to take action.”

Ted Jenkin, Co-CEO, oXYGen Financial

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that it can take more effort to form connections on Twitter, but argues that those connections are more “authentic” than the ones an advisor may build on a platform such as LinkedIn. “You’re really letting people know who you are and what you’re about,” she says.

Facebook. A general consensus among social-media-savvy advisors is that Facebook isn’t as powerful a platform for building an audience and engaging clients and prospects. One reason may be the sheer volume

of information that passes through the typical Facebook user’s news feed: An advisor trying to stand out on Facebook must compete with a feed full of posts from friends, family members, business connections, and other contacts. That said, some planners have found success using Facebook to foster ongoing and direct communications with clients. And Facebook may also be more widely used by your older clients.

Blogs. Ted Jenkin, co-CEO of OXYGen Financial, says his blog, “Your Smart Money Moves,” has been a powerful lead driver. But he also notes that building a following that can generate leads takes

considerable effort. Stephanie Sammons, founder and CEO of Wired Advisor, a digital marketing company for financial advisors and financial firms, says that’s the reason blogging can be so challenging for advisors is that “the results are not visible in the beginning. This is digital equity that you need to build over time.”

MAKE THE MOST OUT OF YOUR SOCIAL MEDIA EFFORTS Many advisors may begin their social media efforts by focusing on one platform. But the goal, according to Sammons, is to eventually maintain a presence on several social networking sites. “I think it’s probably not wise to bet the farm on one or the other,” she says. “Things are changing so rapidly. We don’t really know what this landscape is going to look like in the next five years.” The takeaway: Take steps to learn the ins and outs of other platforms—even if you plan on sticking with your favorite social media outlet.

Whatever platform you decide to use, certain universal strategies can help you differentiate your social media efforts from your peers’. For example, simply passing along someone else’s content may be enough to keep your name in front of clients and prospects, but sending original content can help you deliver greater value to these audiences. “Look at social media as distribution for your thought leadership and your insights,” says Sammons. “The social media network you build allows you to stay visible and valuable on a consistent basis.”

Original content can be anything from comprehensive, regular blog posts; to short Twitter commentaries accompanying links; to studies, articles, and other online material. The key is to add your voice to your social media interactions. Take care to keep the content interesting and your audience engaged. One way to do that, says Sammons, is to put yourself in your clients’ shoes. “You’ve got to get creative and think holistically about the things that are on your clients’ minds day after day,” she says. “That goes beyond the typical financial planning–type content.”

PRO TIPS

“ Compliance is relatively straight-forward: Don’t say anything stupid that would get you in trouble in any context face-to-face. If you sell stocks face-to-face, you’re going to get in trouble. If you sell stocks in social media, you’re going to get in trouble. The list of things you can’t say on social media is the exact same list of things that are wrong to say in any other environment.”

Michael Kitces, Partner and Director of Research, Pinnacle Advisory Group

“ With social media, we can really share who we are, what we’re about, and what our values are. Younger generations have seen that bad things can happen, so we’ve got to get them trusting again. By being good, authentic people, they’re going to do that. If it’s used correctly, I think advisors are going to do well to get onboard with social media.”

Carolyn McClanahan, President, Life Planning Partners, Inc.

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For instance, Ted Jenkin built his blogging efforts around a simple question: What do people actually care about? That may mean writing about how much to spend on a wedding gift rather than focusing on how to trigger stock options.

Leverage your social media interactions to bring users of different platforms back to one place. For example, include a direct link to your website or blog in your LinkedIn profile, you can have information about how to contact you and how to access more of your original content.

Remember that not charging for content doesn’t have to mean giving it away for free. For example, Jenkin’s firm, oXYGen Financial, gives away e-books on topics such as saving for college and avoiding common money mistakes. But before downloading, users need to fill out a basic form with their contact information. “It’s sort of a quid pro quo,” he says. “It’s been very successful. I generate hundreds of leads a year. I get to sit at my desk and they just come into my email box.”

For many advisors, these types of scenarios—for instance, generating a steady stream of referrals and new prospects, all from a few well-placed keystrokes—is one of the most attractive opportunities offered to advisors by social media platforms. But it’s also becoming clear to advisors that it takes time and effort to unlock the true potential of social media. As a result, advisors should devote the resources to learning how best to leverage these platforms. After all, it’s not enough to simply use social media; these days, advisors must know how to make the most of these powerful tools.

If you’re new to social media, decide on one strategy and one platform, then invest well. It’s better to execute a small vision well than a big vision poorly. If you’re a veteran looking to sharpen your craft, review your social media efforts to date and ask yourself whether they align with the goals you initially set out to accomplish.

BOARDROOM PARTICIPANT BIOS

Mike Byrnes is a national speaker and president of Byrnes Consulting.

Michael Kitces is a partner and the director of research for Pinnacle Advisory Group, and publisher of Nerd’s Eye View.

Jamie Cox is managing partner with Harris Financial Group.

Jeffrey G. Kitzberger is founding Partner of Olympus Wealth Partners, Inc., and partner of Stratos Wealth Partners, Ltd.

Blair Hodgson DuQuesnay is director of investments of ThirtyNorth Investments, LLC.

Carolyn McClanahan is president of advisory firm Life Planning Partners, Inc.

Kevin Feehily is a consultant at Byrnes Consulting.

Stephanie Sammons is founder and CEO of Wired Advisor, a digital marketing company for financial advisors.

Ted Jenkin is co-CEO and founder of oXYGen Financial.

Bill Winterberg is the founder of FPPad.com and host of Bits and Bytes, a weekly broadcast covering technology news.

Boardroom participants quoted in this article do not necessarily reflect the views of LPL Financial. WealthManagement.com and the Boardroom Participant businesses listed are separate entities from LPL Financial. For financial professional use only. Not for use with the public.

REFERENCES1 Cogent Research, “Social Media’s Impact on

Personal Finance and Investing,” 2013.2 Accenture, “Closing the Gap: How Tech-Savvy

Advisors Can Regain Investor Trust,” 2013.3 Spectrem Group, “Millionaire 2012, Volume 3 -

Relationships with Advisors,” 2012.4 Pew Research Center, www.pewinternet.org/

Commentary/2012/March/Pew-Internet-Social-Networking-full-detail.aspx

5 Pew Research Center, www.pewinternet.org/ Commentary/2012/March/Pew-Internet-Social- Networking-full-detail.aspx

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