Many advisors still opt for the social media sidelines, but watch out: Early adopter status is slipping away

If you have been turning a blind eye to the social media revolution, you are not alone. Conventional wisdom may have led you to believe that social media is merely a youthful experiment best dabbled in by the next generation. E-mail, however, was once similarly trivialized, and social media is now destined to become every bit as widely adopted

According to a LederMark survey of 175 financial services executives from across the industry, advisors employed by national firms and those of a certain vintage are waiting things out.

Six primary worries keep many professionals from employing social media to grow their businesses:

We can’t control the message on social media.
Our legal and compliance people won’t allow it.
It takes too much effort to create and refresh content.
Our clients are older and don’t use social media.
There is too much noise in social media.
We’re simply too busy trying to do more with less.

The chorus of objections is grounded in consensus, but is the consensus correct? Just as you might take an investor through his financial biases point by point, let’s examine each statement in the context of this communications phenomenon:

We can’t control the message on social media. True. You can start a conversation through social media, but you don’t control what happens afterward. Realistically, there is very little chance your friends, followers and contacts will stray from conversation in a way that is harmful to you.

Our legal and compliance people won’t allow it. Contrary to popular belief, you will not find a regulation on the books of FINRA or the SEC that outlaws advisors’ use of social media. In fact, FINRA has published an advisory ten months ago called Regulatory Notice 10-06, Social Media Web Sites, to guide firms in managing their advisors’ lawful use of social media. Some independent financial advisors are already blogging, engaging in discussions and connecting through groups in social media. National firms will likely follow suit with more permissive social media policies once they do two things: 1.) Put in place the mechanism for archiving and preserving social media communications (except Tweets, which are deemed “public appearance“ by FINRA) and 2.) Adopt the notion that social media, like email, is an unstoppable force that will be universally accepted by their competitors, replacing cold calling and building business networks for the next generation of investors.

It takes too much effort to create and refresh content. It is true that fresh content is the lifeblood of social media. At the same time, it is easy to see where social media expectorates a glut of information and a paucity of perspective. You have the access and platform to weigh in judiciously, frame arguments around breaking news, bring a fresh viewpoint to a topic of mutual interest – there is an unlimited appetite for perspective. A term called curation has been coined to capture the value created by sifting through the blizzard of information and serving up relevant facts and perspective to followers with related interests. Once you join in as an observer – or assign the youngest member of your team to engage – you can hear the topics, tone and voice of your network members. You can evaluate the topics and type of information you deem valuable from the chatter. Your own content and voice will emerge from your participation as a spectator.

Your clients are older and don’t use social media? Are you sure about that? Social networking usage grew 88% among users aged 55-64 over the last year and 47% of 50-64 year olds now indicate they use social media, according to a study by the Pew Internet & American Life Project. Given the wealth, intellectual curiosity and vibrancy of your clients, perhaps many of them are among the “social” half?

There is too much noise in social media. Right again. Facebook invitations from your hair stylist to the local coffee shop appear from every corner. Some friends want to over-share in weekly updates about trips to the next town over. Who has time to read all this? Beneath all the chatter, there is something more: people with like interests are forming groups, sharing information and connecting on common ground. In these activities, there is an opportunity to reach serious professionals with whom you can start an easy dialogue. There is value in your ability to identify and grow an audience this way.

Too busy doing more with less? The business downturn has accelerated the adoption of more cost-effective communication vehicles, including paid search on Google and other search engines, social media and email blasts. Social media marks the very definition of a low-cost strategy to build one’s professional and social networks.

The insurance industry preceded investment firms down this path, once their trade groups published social media guidance late last year. A technology workgroup of the Independent Agents and Brokers of America (Big “I”) published a guide called, “Creating a Social Web Policy for your Independent Agency,” to help agents navigate the social media waters for prospecting safely and within regulatory guidelines.

Among financial advisory firms, today’s Early Adopters are largely independent advisory firms. They once began by posting a profile, joining LinkedIn groups, engaging in answering questions. By updating their networks with news of interest, agents are keeping their own names in front of hundreds of network members. Many are now taking the next step: inviting group members to events, blogging, building a following and continuing offline with relationships sparked by a social media conversation.

Social media is a cultural and communications phenomenon that is revolutionizing how we communicate in our social and business lives. Some predict the medium will render email obsolete. With or without us, the next generation of investors will be communicating, selecting service providers and navigating information differently than ever before. If you have read this far, you understand that financial advisors who embrace social media now still have time to gain advantage over others who are too busy to notice, but the windown for early adopters is closing fast.

Gerri Leder is president of LederMark Communications, LLC, a marketing strategy and communications firm serving financial advisors and financial services firms. Read more LederMark financial marketing perspectives: https://tinyurl.com/LederMarkBlog.