How advisors and firms can up their social media game

While it's true that younger consumers are digital natives, not enough wealth management firms are using social media effectively to build relationships with those up-and-coming clients. 

Less than 10% of surveyed wealth management professionals across the industry see their firms as "very successful in leveraging social media" for customer acquisition, according to a recent report by Arizent, Financial Planning's parent company. Only 24% said they relied on social media to generate new leads, reflecting the industry's long-standing tendency of relying on word-of-mouth and old-fashioned referrals for new customers. 

Smaller firms in particular identified a lack of a social media presence as a problem. Among firms with less than $100 million of assets under management, only 37%, just over a third, said their firm was actively advertising on social media channels — compared to 55% of mid-sized firms with AUM between $100 million and $999.9 million, and 57% of large firms with AUM of at least $1 billion. 

Read more: Unleashing automation: Attracting the next generation of investors

Yet, in the same survey, the vast majority of respondents — over 80% across all firms — felt that social media was "somewhat or very important" in winning the hearts and wallets of Generation Z and millennial clients. 

"Smaller firms should consider upping their social media game if they don't want to fall further behind their larger peers that more aggressively use it, especially as part of their outreach to younger investors," Arizent said in the report.  

Given that these younger consumers stand to inherit trillions of dollars in the ongoing great wealth transfer, they could decide to seek a new advisor who can better relate to them. Some of them may be new to wealth and soon seeking to find someone that can guide them through building their portfolios over time — an immense opportunity available to those who harness social media to stand out. 

The Arizent report noted that firms overall were least active using social media to build "influencer teams," with specialized staff who had expertise in social media strategy — although here too, smaller firms lagged bigger ones in doing so. When they did invest in social media, firms generally focused on advertising and lead-generation outreach. 

"Large firms are also more active than small firms employing social media for outreach to attract new customers, creating customer personas, leveraging (customer relationship management) tools that can respond to social media threads and mining social media prospects to qualify new leads," Arizent said.  

Read more: 5 takeaways from Arizent research on using tech to win next-gen clients

While advisors may be limited in what their employer is doing, those who are able to grow a social media presence on their own certainly have opportunities to up their game. 

Snappy Kraken

Robert Sofia, co-founder and CEO of wealthtech marketing firm Snappy Kraken, said that while he had seen individual advisors growing more comfortable with social media usage over the past two decades, he generally found that many advisors still made common mistakes that hurt their ability to gain a large following. 

"The rub is not so much about willingness or desire, but about actually making the commitment to using it consistently and using it properly," Sofia said. "Most are not using it well."

Sofia said he will see an advisor spread themselves across multiple platforms, when their core audience may really only be on one or two. They then automate "whatever canned content is compliance-approved," creating a generic experience for readers that fails to impress and may even turn off prospective clients.

Case in point — last week's fourth of July posts on Twitter, where numerous financial advisors were caught putting out identical posts and images wishing their clients a happy and safe holiday. Financial technology expert Bill Winterberg compiled those into an amusing video montage. 

"When you're marketing to everyone, you're really marketing to no one," Sofia said. 

Other tips include using video content more, which Sofia said is highly effective at getting audience engagement across all platforms and is easy to post across multiple channels, and offering clients or perspectives the ability to reach out via a compliant text-messaging number posted on one's social channel. 

Finally, advisors should share a few personal posts from time to time, Sofia said. "Maybe for every four business posts, you post something personal." This could be family trips, hobbies, or anything a bit revealing of their other sides as a person. 

"Advisors who are all buttoned up and posting under a brand name and never reveal anything about themselves just don't get the same level of engagement," Sofia said.