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Asset Managers Need to Support Advisor Social Media Efforts

By Jesse Mark

Social media adoption among advisors is growing quickly. Today, the majority of advisors use social media and not just for personal use. A recent study from American Century shows that advisors are using social media for a multitude of business purposes including business-building, researching contacts, and sharing content with clients.

While there remain roadblocks at some distributor home offices preventing advisors adoption, a number of distributors are beginning to support their advisors on social media. This week, Morgan Stanley Smith Barney (MSSB) announced a plan to let advisors communicate and share content with clients through LinkedIn and Twitter.

Already, both Raymond James and Commonwealth have opened up their doors to allow advisors to post content and respond to client comments and questions without company pre-approval. Other broker dealers are moving in the same direction. According to a survey of independent broker dealers by InvestmentNews, 71% of IBDs permit their advisors to use social media for professional purposes.

The increasing usage of social media for business purposes presents a large opportunity for asset managers. Firms need to think about how to help financial advisors design and execute outreach that integrates traditionally off-line campaigns (prospecting letters, postcard seminary invitations, etc.) with new solutions on social media. A time when prospecting letters and PDFs being obsolete is hard to imagine, but it might not be too far off on the horizon.

For years asset managers have provided actionable content for advisors to share with clients. But as advisors shift towards social media to engage with investors, they will need to restructure their value-added content. A key opportunity for asset managers is to provide:

• Educational content on how to use social media as a business-building tool - Advisors want to reach investors where they are but are also treading in a new and uncomfortable environment. While most advisors use social media for personal use, they may not know how to use LinkedIn, Twitter, or Facebook for business purposes. Asset managers should develop information guides on how to connect with current clients and prospects on social media, and how to create or re-purpose content for followers.
• Value-added content optimized for social media sharing - Many advisors once (some still do) created a monthly newsletter about current economic issues and sent it to their clients. When monthly newsletters became obsolete, e-mail newsletters came into vogue. But increasingly this advisor-investor communication is moving to social sites. Advisors are sharing topical articles and content with their followers. Asset managers that want to be top of mind need to make sure the content they produce can easily be shared with the advisor's clients.

Social media offers a new way to engage affluent Gen X and Y investors who will serve an increasingly important client base when Baby Boomers retire and decumulate. As always, asset managers that are adept at listening to advisor needs and creating actionable, value-added content reap substantial rewards. Is your firm preparing for the tectonic shifts in advisor behavior that are currently under way?