Exactly half of financial advisors are using social media for professional purposes, according to the results of a new survey by the Principal Financial Group, which polled 614 financial advisors about their work habits. Less experienced financial advisors are more likely to use social media for some purposes, which provides a more effective way to reach affluent millennials (who are however generally neglected by the financial advice industry).
Asked how and why they use social media professionally, 25% of financial advisors said they use it to communicate and deepen relationships with existing clients, while 23% said they use it to help find new clients. Overall less experienced financial advisors -- meaning advisors with less than ten years of experience -- are more likely to use social media primarily to find new clients, at 46% versus 20% for more experienced peers. Of course this may simply reflect the fact less experienced advisors tend to be younger and more comfortable with social media.
Currently the financial advice industry isn’t doing a good job reaching millennials, which is unsurprising, considering 64% of advisors said they target Baby Boomers. Millennials are leery of working with financial advisors for a number of reasons, including fees and costs at 29%, plain old fear at 16%, and thinking they can do it themselves at 10%.
Earlier this year I wrote about a survey by American Century Investments, which found that a majority -- 61% -- of financial advisers said social media had a “high” or “medium” value to their business. Similarly 56% of advisers surveyed by ACI said they think social media has significant business potential, up from 44% in 2010.
The proportion of advisers who dismissed social media as a passing “fad” fell from 22% in 2010 to 13% over the same period, and the proportion who say their firms are “not yet seeing the value” of social media fell from 40% to 27%. On that note, the proportion who think asset management firms are “smart to explore” social media increased from 41% to 53% over the same period.