Which financial institutions "get" LinkedIn? Jennifer Grazel, the social media network’s global head of category development - financial services, offers up several examples.

Morgan Stanley financial advisors use it as a business development tool. “One targets small business owners and has generated $70 million in investable assets through networking and referrals on the site,” says Grazel, who in prior lives worked at Citi, GE Money and Prudential.

Another financial advisor at Morgan Stanley helps female heads of households manage their financial futures. The advisor makes liberal use of specific keywords such as "independent,"  "woman" and "financial advisor" in her LinkedIn profile and the materials she posts. This helps her rise to the top of search rankings when those keywords are used.

"If you ask her why she’s leveraging LinkedIn, she’ll say it’s to stay connected and provide valuable updates to current clients," Grazel says. The advisor shares presentations, videos, white papers, and calculators by posting them to her profile page and her company page.

Many financial advisors read their crowdsourced LinkedIn news feed every morning, Grazel says, to understand which news articles are top of mind for people in their network and industry. "They’re able to share that through the platform," she says.

Some look for life changes in their clients' status updates, such as a new job. In 2011, more than 1.2 million LinkedIn users changed companies, which equates to $40 billion in potential rollover funds, Grazel says.

Other advisors seek referrals from customers in their network. “There are no more cold leads,” she says. “In the platform, you’re able to turn a cold lead into a warm lead.” Some financial advisors are very active about posting notes and research, to present themselves as subject matter experts.

A very different role model is Citigroup, which has an active LinkedIn community of female professionals called Connect that’s related to its 10-year-old Women & Co. program. In this forum, members crowdsource ideas about work/life balance, starting a business later in life, financial planning, and divorce. Within its first year, Connect attracted 130,000 members, some of whom are Citi customers. “It’s one of our most active groups,” Grazel says. “It’s a good case of using advocacy to create community.”

In another community-building example, American Express hosts a LinkedIn group called Open Forum for small business professionals. "The goal is to help small businesses succeed by giving them access to knowledge, tools and insight,” Grazel says. “American Express brings in outside experts and lets members crowdsource knowledge."

Occasionally a banker rises to the level of "Influencer" in LinkedIn's world. There are only 200 Influencers, or subject matter experts, who share their wisdom on LinkedIn Influencer blogs. Frank Eliason, director, global social media at Citi, is one. Other influencers include Barack Obama; GE CEO Jeffrey Immelt; Virgin Group founder Richard Branson; and former banker Sallie Krawcheck. "They're humanizing their voice and conveying thought leadership," Grazel says.

In all these use cases, the companies are not aggressively selling products. They are serving their core audience, establishing thought leadership and improving their net promoter scores, she says. "They're facilitating discussion, they’re not actively pushing content at people. They’re injecting themselves in the conversation."

What are the biggest mistakes financial services companies make on LinkedIn?

"Where companies have not had success is where it’s a publish mentality,” Grazel says. “They're not varying content or messages by platform and not taking into account the different needs. They're not doing that upfront research to make sure they’re relevant to their audiences."

The different social platforms each have unique mind-sets, she explains. “On LinkedIn, we have a purposeful mind-set, our mission statement is to allow our members to be more successful and productive in their everyday lives,” she says. Messages that only promote a product and fail to provide useful guidance are potentially off-putting.

Grazel also shared the results of research LinkedIn has commissioned about the way financial advisors and wealthy individuals use LinkedIn.

“Financial advisors use LinkedIn as a business management tool, a relationship management tool with current clients, and a source of knowledge through network updates and groups,” she says.

The study found that 70% of financial advisors use social media, and nine out of 10 of those leverage LinkedIn, more than three times the other social networks combined. "This is a direct result of the revenue they have seen," Grazel says.

More than 60% of financial advisors on LinkedIn use it for business development; 32% of those are generating a million dollars or more in investable assets on the network.

According to Grazel, this is because LinkedIn is where high-net-worth investors are. Research conducted by Cogent found that five million of the 40 million high-net-worth investors (defined as those with $1 million to $5 million in investable assets) in the U.S. turn to social media when making personal finance and investing decisions.

A notch below that, the mass affluent (those with $100,000 to $1 million in investable assets), who tend to be younger and more self-directed, are even more involved with social media: 87% use it in some way and 44% use it to engage with financial institutions.

About a third (36%) of mass-affluent consumers turn to social media for discovery (learning about financial trends, companies, products, or accounts) and consideration (seeking advice and further information to evaluate what they’ve learned). Of that group, 63% of those who pursue both activities take action based on what they learn – whether opening or closing an account or purchasing a new product or policy. "When you think of the incoming millennials, there's going to be a strong growth trend there," Grazel says.

However, only 4% of financial advisors are connecting with their current customers on social media. On the client side, when asked if they would want to connect with their advisor over social media, 52% of high-net-worth investors said they would find value in that. "There's a big opportunity to leverage LinkedIn as a vehicle to keep your current clients," Grazel says.

The three most valuable types of information surveyed mass affluent consumers said they were looking to receive were improved customer service, timely updates and relevant content. For brokerage services, they were looking to receive new product information, market commentary and performance updates. Those scoping out banks and credit card providers were looking to receive new product information, account changes and company information.

Mass affluent consumers turn to their social media circles first in the "discovery" phase of looking for a financial institution. "They turn to their first degree of connections and the content that's shared and vetted by their social network," Grazel says. "Social plays a huge role because that information is curated, filtered and vetted by their social network. When you look at key activities, content trumps all other activities by six times. We'll be becoming more and more an insights-driven platform." 

Read more: