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How using social media can boost advisors’ AUM

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As social media evolves beyond its youthful origins, its potential for helping financial advisors boost their AUM and adding wealthier clients is increasing.

Investable assets of clients gained through social media last year rose to $1.4 million, while the average new account size held steady, according to a recent Putnam Investments survey. Previous Putnam studies found intermediate users of social media brought in between zero and $1 million in investable assets through social media use.

What’s more, some “high-achieving” advisors have increased their AUM by 10% or more by maintaining an active social media presence, the survey reported. These tech-savvy advisors reported average gains of about $15.3 million to their AUM, or over three times the average for all advisors, according to the survey.

And clients arriving via social media are also getting older. In 2018 the average age of clients gained through social media was 40 years old, compared to an average age of 35 in 2017, according to the survey.
With 92% of advisors reporting a gain of new clients through social media, many also say the platforms are shrinking the time it takes to turn prospects into clients. Communication — and opportunities — occur in real time, on the channels where clients feel comfortable.

People “feel much safer asking their local community [Facebook] pages for a financial advisor recommendation,” says Ryan Marshall, an advisor at Ela Financial Group. “It’s the same as when they ask their community pages ‘Does anyone know a local contractor?’ or ‘Can anyone recommend a good ophthalmologist?’”

“You see a lot of people doing it wrong," says Sean Williams, advisor at Sojourn Wealth Advisory.

Fierce competition is driving 80% of high achieving advisors to use premium services, like sponsored ads or hiring a marketing firm, while 58% report that social media plays an integral part of their practice, according to the survey.

“When it comes to marketing I don’t believe there is a silver bullet that is going to be the end all and be all for obtaining new clients,” says Marshall. “I do believe we need to not just cast a wide net to get your name out there, but also give potential clients value in the articles and posts you make.”

Sean Williams, advisor at Sojourn Wealth Advisory, agrees. “You see a lot of people doing it wrong — writing canned posts or being too general or off-topic to really have an audience in mind.”

Williams is a frequent Facebook poster and tries to produce one video a week, uploaded on LinkedIn and YouTube, which discusses personal financial advice. A recent series, called Eight Questions Over Coffee, was filmed on location while he asked his clients to think about their own financial journey.

“We need to be extremely thoughtful about our content when it comes to our audience. It takes a great deal of time, effort, and patience for it to be done right,” he says. Williams says this evergreen content isn’t about “vanity metrics” — such as views counts or likes — but about the trust it helps initiate with his clients.

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