SAN DIEGO – Social media is starting to shake up the world of wealth management, but amid some big success stories, many advisors are unclear whether it’s worth their time.

Some financial advisors are quickly attracting new clients and building thriving practices through social media networking, said three top industry executives at a heavily attended panel discussion Tuesday evening at the Financial Services Institute annual conference.

“Most advisors had expectations of a miracle early on,” said Eric Schwartz, CEO of Cambridge Investment Research. “We’ve seen some home runs with it, but that’s because of the age of the advisors.”

For example, he said, a few groups of young planners are using Facebook to target young doctors. “That’s the first tip of the iceberg in seeing what can be done. I suspect in two or three years, one of these groups will be a couple-of-million-dollar offices,” Schwartz said.

“We’re going to learn more from them than they’re even going to learn from us," he added. "We haven’t really been pushing the older generation -- [but] it’s empowering the younger generation,” he added.

As Adam Antoniades, CEO of First Allied, described it, advocating for advisor use of social media means having “skin in the game, that’s what it’s all about. The biggest thing we can do -- and everyone can do it because it doesn’t cost a penny --is creating awareness, making sure we’re enabling them in the right way.”


Yet for many, that won’t nearly be enough. “I know intrinsically I have to get involved, but I don’t know how to get involved,” said Steve Chipman, CEO of Foothill Securities, relating sentiment at his firm. Among the problems with social media: “We’ve got this regulatory environment that doesn’t allow us to operate in a free and open manner.”

Antoniades stressed supplying compliance-approved content to planners. Yet thus far, fear really has dominated efforts at adoption, he said. After a six-month internal education process at his firm, just seven advisors started using social media. He added that his LinkedIn account was flagged internally by compliance after someone unexpectedly “endorsed” him – the equivalent of a testimonial, which is prohibited by regulators.

Setting realistic expectations at advisory firms for social media usage would help planners gauge how to move forward. Among those who are comfortable using Facebook, “I think probably 60% of them have captured some clients,” Antoniades said. “Any time you talk to an advisor and they have a new marketing idea, they think business is going to rain in.”

With questions from the audience running out at the end of the discussion, the moderator,  Brett King, CEO of Movenbank and author of Why Banking Is No Longer Somewhere You Go But Something You Do, noted: “I think everyone wants to get to drinks.”

“It’s the old-fashioned form of social networking,” Schwartz said.

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