Compliance concerns, inexperience and general apathy conspired to keep many financial advisors and firms from fully embracing social media in the way that so many other industries have throughout the past five years.
But that's starting to change and, according to new poll from the SEI Advisor Network, those advisors who are most open to putting themselves out there on sites like LinkedIn, Facebook and Twitter are starting to see a tangible return for participating.
The survey of 185 advisors found that while almost 80% of wealth managers now have "some business presence" in the social media universe, 56% acknowledged they were only "tip-toeing" into it.
However, one in five (18%) advisors surveyed said they had landed a new client as a direct result of their social media activity.
SEI officials said the results clearly demonstrate the value that social networks can provide, even as a majority of advisors have been slow to implement comprehensive strategies.
"Savvy advisors are beginning to realize social media is as much a business development tool as it is a communications vehicle," John Anderson, SEI's head of practice management, said in a statement. "What the survey shows is that advisors have the opportunity to see real business returns if they can begin to put social media plans, processes, and policies in place, rather than just using it sporadically."
The poll revealed that while 19% of advisors still admit to having no social media presence at all, 94% said they plan to step up their social media endeavors in the coming year.
So what's keeping nearly one in five advisors from eschewing social media altogether?
Thirty-seven percent said coming up with frequent and relevant content was the largest impediment, followed by "broker-dealer concerns" (30%) and another 15% cited the "future regulatory environment."
"Most advisors have moved past their initial concerns about social media," Tim Shanahan, CEO of Compass Capital in Braintree, Mass., said in a statement. "We, like many advisors, now realize that social media is a powerful tool that can help us target specific groups and individuals to uncover business opportunities - especially, younger clients."
The survey was conducted as part the SEI's Monthly Practice Management webinar series for financial advisors.
Larry Barrett writes for Financial Planning.