Web 2.0 and the use of online social media is on the rise within the industry. It appears that reticent financial advisors are finally getting their arms around the real-time interactive web and wading in while others are still holding back with a bit of trepidation or saying “prove it’s worth my time” before they’ll invest any time and money in building anything more than a simple website to create an online presence.
But in my consulting work and travels, where I continually speak with hundreds of financial advisors every year, I am hearing stories – stories of naysayers who are now seeing it wasn’t quite as hard as they thought it would be, it doesn’t take up as much time as they thought it would, and it’s paying off more than they’d initially thought possible.
"Online Marketing Methods: Planner Best Practices," a white paper published in May 2009 by the Denver-based Financial Planning Association, states that 43% of advisors reported using social media/online networking sites. In addition, 32% of advisors said they used audiocasts and webcasts, while 17% reported they used blogs in their practices. Sixty percent of advisors who participated in online social networking generated at least 16 leads per year. The results were based on responses from 331 FPA members.
While it’s been approximately 2 ½ years since that study published, anecdotal evidence shows that advisors are realizing even greater success using today’s interactive, real-time web to amplify their voice and position themselves not just as thought leaders but as social creatures on a mission to educate the public on all things financial.
One advisor—an early adopter who’s been blogging, tweeting, and using Facebook, audio and video to communicate with his clients and the general public for sometime now—says he’s now getting about 50% of his new clients by being visible online. Clients with million dollar accounts are finding him online—and they’re bringing him their financial planning business and investable assets after a suitable courtship period, much of which is augmented using live webcasts and video chats, as well as recorded-and-emailed (or posted) digital communications.
Last week I presented “Social Media Blunders / Social Media Success” via webinar for the NAPFA Genesis group. Over the coming weeks, I’ll be sharing some of the insights I gleaned in talking with a handful of NAPFA members who are realizing success with social networking online. They even allowed me, quite generously, to share some of their social media blunders.
This week, we’ll look at the way social media and the interactive web are changing the way we do business.
Who Uses Social Media?
Perhaps you’re thinking that social media primarily for kids. That’s not necessarily so.
A report published in 2010, part of the Pew Internet & American Life Project, says that 47% of Internet users between the ages of 50 and 64 use social networking sites such as MySpace, Facebook and LinkedIn, as do 26% of users aged 65 and older. That is up from the 2009 figures of 25% and 15%, respectively.
As of August 2012, 65% of adult Internet users in the United States participate in social networks such as Facebook, Google+, Twitter or LinkedIn, up from 61% a year ago. These figures come from the newest report from the Pew Research Center, a not-for-profit research group that studies consumer behavior and the Internet. Moreover, for the first time, half of all U.S. adults—not just those who say they are online—say they have interacted on social networks. That’s a huge increase from six years ago, when 5% of U.S. adult said the same.
Mary Madden, a senior research specialist for Pew, said that while social media use has grown dramatically across all age groups, older users have been especially enthusiastic over the past year about embracing new networking tools. Between 2010 and 2011, the adoption rate grew 150% among users age 65+, increasing from 13% in 2009 to 33% in 2011. The rate doubled among users aged 50-64, increasing from 25% in 2009 to 51% in 2011.
Why Are Older Americans Using Social Media?
One of the main reasons for older adults' increased interest and use of social networking sites: They know Facebook and Twitter are where their kids and grandkids are spending time, and it’s a way to "bridge generational gaps." "There are few other spaces — online or offline — where tweens, teens, sandwich generation members, grandparents, friends and neighbors regularly intersect and communicate across the same network," she said.
Older social networking users are "much more likely to reconnect with people from their past," Pew said in the report, "and these renewed connections can provide a powerful support network when people near retirement” or “embark on a new career."
Another reason to seek camaraderie on social networks: health problems. "Older adults are more likely to be living with a chronic disease, and those living with these diseases are more likely to reach out for support online," by blogging about it or taking part in online health discussions, Pew said in its current report.
E-mail does remain "an essential tool" for older Americans’ daily communications, Pew said; 92 percent of those ages 50 to 64, and 89 percent of those ages 65 and older say they send or read e-mail, and more than half of each age group e-mails on a "typical" day.
Checking online news sites daily also is a regular habit for many; 76 percent of Internet users ages 50 to 64 say they check news online, and 42 percent say they do so on a "typical day." Among Internet users 65 and older, 62 percent say they look for news online, and 34 percent do so on a typical day.
Many Americans now consider blogs mainstream. Traditional news outlets such as the New York Times and Wall Street Journal have mainstream writers blogging, stimulating interaction and “user generated content” and building their brands online.
For an eye-opening look at how social media is growing, watch this entertaining 4-minute video, “Social Media Revolution.”
What’s Ahead?
Next week, the Marketing Maven will discuss: Why Forward Thinking Financial Advisors are Embracing Social Media.
On the conference front, I’m looking forward to seeing old friends and new at the following events:
Finally, a big thank you to Transamerica Financial Advisors. It was a great honor to present last week at your national conference the findings of my Top Advisor interviews. Readers: I’ll be bringing more or those advisor case studies to you, right here on the Marketing Maven blog.
