With the explosion of social media as used on the personal front, it wasn’t long before businesses and professionals picked up on the marketing potential that can be tapped via social media platforms. The power of social media allows businesses to reach their target audiences almost instantly and to simultaneously convey their message in a cost-free way.

In the world of financial advisory, however, a relatively unique but not entirely new approach to using social media as a marketing tool has emerged.

Networking & Marketing

Financial experts are required to comply with a specific set of regulations when marketing and advertising their services as financial advisors. This makes it very difficult to effectively use social media marketing techniques, or any other online marketing tools for that matter, if advisors are to strictly comply with those regulations set by the Investment Industry Regulatory Organization of Canada (IIROC) and Mutual Fund Dealers Association.

Financial advisors are finding that it’s not quite worth jumping through even more hoops, in addition to the many regulatory regime changes that are already a big part of the financial planning world, just to use social media as a direct marketing tool.

The next best thing? Financial advisors are using social media as a networking tool rather than as a direct marketing platform. These professionals are often tied to their business or trade anyway, and in this way are already linked to their business service on social media platforms, even when engaging their network of contacts on a personal level.

Essentially, financial advisors use social media as a tool to make their expertise known, which is the first step in landing clients as prospects: Identify with them as experts in the financial field, as experts clients would possibly like to work with or refer their contacts to.

Growth Trends

Despite the compliance concerns, as well as the adoption of the networking route over direct marketing to bypass these compliance concerns, the vast majority of financial advisors are adding social media marketing policies to their books. Upwards of 80% of advisors are legally taking advantage of the sheer power of social media for marketing purposes.

According to social media platform statistics, 9 out of 10 advisors already make use of LinkedIn, while 60% of those financial advisors have acquired direct business from their LinkedIn accounts. Facebook and Twitter are used mainly for the networking aspect of social media marketing, while LinkedIn is the preferred platform to explicitly link financial advisors with their professional offering. It is interesting that some advisors, who as recently as three years ago said they would never use social media, have actually adopted the strategy by joining one of the more now-standard platforms or a professional networking group such as the Canadian Wealth Advisors Network (CWAN) on LinkedIn.

The age factor seemingly has no bearing on the use of social media by financial advisors. Rather, the defining factor of whether a financial advisor uses social media for marketing seemingly lies with whether he or she already uses social media for personal reasons. Investment advisors are more inclined to use social media to market their business if they are already using the platform on a personal level. An interesting note is that 43% of Canadians 55 years or older use social media.

Given that various social media provide the potential to reach a wide range of clients, advisors will continue to find new ways to incorporate this fairly new means of networking into their marketing strategy, and the process will continue to evolve over time based on the competitive needs and regulatory requirements of the industry.