Financial Advisers Catch Up With Social Media

Financial advisers have been understandably cautious in their approach to social media, due to regulatory issues and concerns about privacy, liability and professional reputation. But over the last few years, more of them are seeing value and embracing social media for communicating with existing clients, finding new ones, recruiting and gathering information.
That’s according to a new 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% today, and the proportion who say their firms are “not yet seeing the value” of social media fell from 40% to 27% over the same period.

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.

Conversely, most financial advisers still believe firms aren’t using social media to full advantage, with just 30% saying that the leading firms are employing it well. While still a minority, that’s definitely an improvement over 2010, when just 11% said firms were using social media to their advantage.
In terms of goals the largest number of financial advisers -- 28% -- said they mainly use social media to find information and expert commentary, up from 22% in 2010, while 16% use it to keep up on industry and market news, up from 12% four years ago. Some 10% use it to share news, and 16% use it to do research clients and potential investments -- down from 19% in 2010.
Regulatory issues remain the biggest obstacle to more adoption of social media by financial advisers, cited by 36% of advisers surveyed by ACI as the reason they don’t participate more in social media. But again, the general trend is improving, as that figure is down from 47% in 2010.

The proportion of financial advisers who cited privacy concerns, including a “potential privacy breach” as a factor limiting their participation remained flat at 21%.
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