Taking on social media: 6 takeaways for financial advisors

June 10, 2022 3:16 PM

Enjoy complimentary access to top ideas and insights — selected by our editors.

With the pandemic putting a stop to almost all in-person interactions, advisors have embraced social media as a way to engage with current and prospective clients. While Facebook, Twitter, blogs and podcasts are helping build their brands, poor advice from FinTok and YouTube finfluencers, along with viral trends such as meme-stock investing, have presented challenges.

For tips on how advisors can use social media to their advantage, as well as ways these digital tools are changing the financial advising landscape, see the stories below.

Sankt-Petersburg, Russia, March 6, 2018: Apple iPhone X with ico

Aleksei - stock.adobe.com

7 ways to create an engaging, compliant social media presence

Competition for new business these days is fierce. Tech-savvy clients expect more from their relationships with wealth managers than investment advice and expertise. For many advisors, social media is the key.

From knowing who your target audience is to understanding the rules for financial services-related marketing, here are seven ways to use social media to connect with current and prospective clients while building your brand.

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7 ways to create an engaging, compliant social media presence

Nizhny Novgorod, Russia - October 03 2020: child with phone in his hands is lying at home on bed. Social Media tiktok is loaded on screen

Natalia - stock.adobe.com

How advisors can battle the #FinTok misinformation tsunami

In a seemingly social media-obsessed world, a recent Credit Karma research report provides some uncomfortable data for advisors: 26% of millennials and 52% of GenZ get their financial advice from TikTok and its platform subset #FinTok.

The platform’s short time limit may be right for today’s short attention span for most content, but 60 seconds or less is simply inadequate for financial advice. Worse still, it’s frequently misleading or just plain wrong.

However, advisors have the power to fight back by embracing TikTok as a platform to engage with viewers in the right way with sound advice, while also expanding their social media presence.

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How advisors can battle the #FinTok misinformation tsunami

Penang, Malaysia - 25 JAN 2022: GameStop Corp stock index and lo

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Why and how I let my clients ‘meme’ like the cool kids

Meme stocks are changing the financial landscape as generally younger, social media-savvy investors chase riskier investments for quick profit rather than long-term growth.

Meme stocks go viral and trend online more due to investor sentiment than business fundamentals, as with GameStop in early 2021.

As their advisor, should you let them? Yes, on a limited basis, by setting up a ‘play’ account, according to Toews Asset Management President Eben Burr. “The funds in the play account should be treated like the money you bring to a casino — only bet what you’re willing to lose,” Burr said.

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Why and how I let my clients ‘meme’ like the cool kids

Should you trust TikTok, YouTube finfluencers?

The popularity of platforms like TikTok, YouTube and Instagram has seen the rise of the influencer in everything from handbags to holiday destinations. So, perhaps it was only a matter of time for the finfluencer, or financial influencer, to emerge.

But while there are many finfluencers bringing quality information via social media to a wider audience that may not have had access to it before, there are others whose advice lacks real substance and are in some cases, like many mainstream influencers, more in it for themselves.

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Should you trust TikTok, YouTube finfluencers?

4 RIA marketing tips to avoid brand devastation

It can take years for advisors to build a book of business and establish their brand through insightful industry expertise, dedicated client service and trusted investment advice.

The right mix of marketing strategies and tactics for today’s social media age can lead to success. With poor marketing, however, both business and brand can quickly suffer. Here are four tips to prevent mistakes that could be harmful to your firm.

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4 RIA marketing tips to avoid brand devastation

Why social media is more important than ever for advisor prospecting

With the demise of in-person communications during the COVID-19 pandemic, advisors quickly turned to social media to stay connected with clients.

“Advisors couldn’t necessarily talk personally with every client in one week, but they could share how to be reached on social media,” said Leslie Leach, vice president of marketing at Hearsay Systems. “They could do a lot of that kind of reassurance there.”

Being good on social media is now indispensable. “It’s certainly important that we have some presence,” said Bill McManus, managing director for applied insights at Hartford Funds. “The question I would have, if I was looking at a finance professional, and there was nothing about them [on social media], is why.”

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Why social media is more important than ever for advisor prospecting