In its recent survey of more than 1,000 professionals, Putnam Investments found that 85% of advisors – up from 75% in 2014 – are actively using social media in their day-to-day work, and they continue to become more sophisticated in their use of multiple social networking platforms for business.
Key findings from Putnam’s Social Advisor Study revealed:
- Effective use of social media by advisors is no longer controversial or unproven
- Advisors favor platforms that provide ease of personalized communications
- Compliance frameworks are well established and generally accommodative
- Advisor social media use is growing in application and sophistication
“The use of social media by the financial advisor community has matured to a level where it is ingrained in how business is conducted and how professionals communicate with their clients and prospects,” said William T. Connolly, Co-Head of Global Distribution, Putnam Investments. “In our ongoing dialogue with financial professionals, it is eminently clear that social media’s role as a critical conduit for advisors in reaching the marketplace is going to continue to deepen and evolve for the foreseeable future.”
So yes, social media for financial advisors is here to stay with LinkedIn, Facebook and Twitter (in that order) being the most popular platforms. That realization is not only coming from prolific social media users like advisors, but also from regulators. At the end of August, the SEC released a final rule requiring investment advisors to list their social media pages such as LinkedIn, Facebook and Twitter on Form ADV in addition to their website address. (The SEC clarified that this is limited to publicly available social media accounts in which the advisor controls the content and are intended to promote the advisor’s business.) This seems a logical next step as regulators view – and regulate – social media just as they would any other form of advertising.
Indeed, advisors reported that firm restrictions on social media use had “leveled off” with compliance frameworks becoming more accommodating. That doesn’t mean all compliance departments have embraced social media with open arms. Of advisors who don’t expect social media to play a significant role in their marketing, 64% cited compliance policies or securities regulations as the reason.
Individual advisors who have successfully leveraged social media to grow their business likely have an “adapt or get left behind” mentality. Advisory firms, compliance departments, regulators and service providers need to have the same in order to support advisors in an industry where change is the only constant.