advisors are social - putnam investments · pdf fileadvisors are social key takeaways...

Advisors ARE social

Key takeaways

Effective use of social media by advisors is no longer controversial or unproven

Advisors favor platforms that provide ease of personalized communications

Compliance frameworks are well established and generally accommodative

Advisor social media use is growing in application and sophistication

IntroductionSince Putnam first formally surveyed financial advisor social media usage in 2013, the percentage of those reporting success in gaining clients via social media has grown from 49% to 80%. The question is no longer whether social media can function within the confines of closely regulated communications and transactions, but rather how social networking strategies work best in tandem with traditional methods to optimize advisor reach, influence clients, and cultivate a successful practice.

“ Customers I friended personally on Facebook had large networks. By creating a Facebook business page and using my personal contacts to initiate interest, I was able to bring on new clients.”

Independent broker/dealer advisor, male, age 39

While there are still advisors who report little or no use of social media, their numbers are dwindling. Across all age groups, adoption of social media use for business is at 85%, but for those advisors above age 65, use is only 60% and not showing signs of increasing. While it is likely that mature advisors prospect less, younger advisors with larger, established books of business are heavy and successful users of social media.

https://www.putnam.com/?ref=EO288.pdf

22016 Putnam Social Advisor Survey

The 2016 survey included 1,018 financial advisors across the United States who have advised retail clients for at least two years, with broad ranges of tenure and assets under management (AUM) represented. The survey provides insights beyond what social platforms advisors use — they include how, when, where, and why.

Top findings

•Advisor adoption is at 85% in 2016, with 80% of “social advisors” attributing gaining new clients to social media. After years of trending upward, adoption appears to be peaking; advisors who haven’t already adopted social media tools may be unlikely to do so.

•In 2016, advisors were asked to compare social for gaining clients vs. traditional networking, with 56% reporting that social media has helped “a great deal.”

•While LinkedIn remains the most popular platform, usage is plateauing, and advisors are accessing LinkedIn less frequently than they do Facebook and Twitter — broader, less formal settings with more potential to build and enhance client relationships.

•For advisors with AUM of more than $100M, 35% report that social plays a very sig-nificant role in their marketing efforts, 82% have used social to gain clients, and the median social-based gain is $4.7M, with the average gain at $8.3M, suggesting that advisors with higher AUM are seeing correspondingly large gains due to social activity.

•As social has become integral to building the business, helping advisors maximize their social media platform has become fundamental to supporting them.

Data and percentages below the top-line findings reflect advisors who use social media for business and/or have gained assets attributable to social media use, as noted.

Facebook is showing continued growth as a preferred advisor platform

Percentages of advisors using each social networks for business.

36

4754

27

42 4436

41 43

1724 27

15

24 21

1320 18

_16

1825

37 35

64

’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16 ’14 ’15 ’16

7073

LinkedIn Facebook Twitter Google+ YouTube Instagram Pinterest Tumblr Snapchat

85%of advisors are using social media for business

80%of “social advisors” gained new clients

$1.9Mmedian asset gain attributed to social media use


Advisor use of social is maturing

With a number of established social platforms to choose from, and more competing for attention and use, advisors can tailor their approach to suit their networking and marketing needs. While LinkedIn, Facebook, and Twitter provide similar capabilities for prospecting, direct messaging, and content sharing, advisors are expanding their use of Facebook and Twitter for brand and relationship building, and using LinkedIn less.

Specifically:

•LinkedIn has gained usage only for connecting with peers

•Facebook is increasingly being used for improving referral networks, brand building, and cultivating prospects

•Twitter is showing similar increases for brand building and prospecting, but also greater use for enhancing client relationships, while LinkedIn and Facebook have declined in this area

“ Clients appreciate a personal touch. Social media allows me access to deeper information into my clients’ lives and provides a solid foundation for a good business relationship and topics for more intimate trust-building discussions.”

Independent broker/dealer advisor, female, age 26, primary network is Facebook

LinkedIn remains the primary network for advisors, but is used less frequently than Facebook and Twitter

Primary network used for business, and monthly frequency advisors use social networks.

LinkedIn Facebook Twitter Monthly frequency

201620152014

5%24% 30% 11% 32% 12%55% 55%56%

1321 19 17

2422 16

2321

82%of advisors managing $100M+ have gained new clients using social media

$4.7Mwas their median asset gain


Facebook and Twitter are gaining as marketing and learning tools

2015 2016 2015 2016 2015 2016

Connecting with peers 59% 64% 52% 53% 56% 56%

Improving my referral network 65 61 54 62 48 45

Building my brand 52 52 57 62 47 53

Enhancing current client relationships 54 50 65 59 49 59

Cultivating prospects 47 44 44 56 43 54

Expanding my professional knowledge 45 43 47 42 51 52

Promoting myself as a thought leader 41 40 43 48 51 50

Use of primary network by business purposes.

Trends in choice of primary network

LinkedIn remains the primary social network for 55% of advisors — only a 1% decrease YOY — and 73% report utilizing LinkedIn over the past year, a 3% increase from 2015. At the same time, survey results show a steady increase in the percentage of advisors using Facebook, from 47% to 54% YOY.

“That’s where my clients are” is the top reason given by advisors (75%) for using Facebook. While LinkedIn has evolved as a business and networking tool — becoming both the virtual Rolodex and Rotary Club — Facebook may better suit casual contact by allowing more regular, ongoing, personal interaction.

On average, advisors are active on social networks for business almost daily, with Twitter and Facebook users the most active. Advisors report that social media has significantly shortened the time it takes to find new prospects — many say that social postings have helped prospective clients know and value their brand — and advisors also report it is showing efficiency in closing new business.

“ I use social media to share advice and to help people — even if they are not our customers. They gain trust in us and use our services.”

Independent broker/dealer advisor, age 53, female

Overwhelmingly, advisors are increasing their use of social media as part of their daily routine, and 70% consider social media to be at least “somewhat significant” to their business.

70%consider social media to be at least “somewhat significant” to their business


Less vague and more manageable compliance requirements

As use of social media by advisors has increased and evolved, so have firm compliance frameworks. To be sure, electronic communications have always fallen within the established regulations covering correspondence and retail and institutional communications to broader audiences. Social media sites also fall under public appearance rules, and increases in device-use restrictions for social are indicative of the maturity of firms’ social media policies and the growing sophistication of middleware and surveillance software, aiding firms in managing social media risk. This doesn’t mean of course that advisors and compliance professionals always see eye to eye.

“ Our compliance department almost puts a chokehold on our marketing efforts. They don’t understand the risks of social media.”

Wirehouse advisor, female, age 40

A majority of advisors (81%) report that their firms have social media policies and that they are aware of the policy specifics. Policies vary by platform, and include not only device and access restrictions (reported by 57% of advisors) but also specifically allow or limit certain social activities, from accepting connections to posting business related content. For example, firms often restrict any mention of an affiliation with the firm on social media, effectively limiting social media to “personal use.”

For the most part, advisors now report that, after increasing over earlier surveys, firm restrictions have leveled off. Of advisors who don’t expect social media to play a significant role in their marketing, 64% cite company compliance policies or securities regulations as the reason, second only to preferring to focus on other methods they feel have been more effective for them.

Accessing social media: Location and devices

57%Compliance restrictions on devices or locations (home, office, mobile)

43%No restrictions on device or location

81%are aware of their firm’s compliance specifics


Social media by platform

The LinkedIn advisor

Wirehouse advisor 24% say social is significant

44-year-old male with 10 years experience

73% gained new clients

$92M AUM

$1.9M median asset gain $5.3M average asset gain

Top 3 activities 70% Accept connections 61% List firm name 55% Request connections

The Facebook advisor

Independent broker/dealer 37% say social is significant



$84M AUM


Top 3 activities 66% Post business content 62% Like companies, brands, people 62% Like, comment, share content

In 2016, use of LinkedIn premium is down 4% YOY; however, those paying for the additional service are using LinkedIn Sales Navigator at a rate of 88%, suggesting that LinkedIn is making headway in providing CRM-like services with advanced prospecting and communication features.

Only 33% of advisors are posting network updates or using advanced search to prospect, and 25% admit to using LinkedIn passively. Comparatively, LinkedIn is used less as a forum for demonstrating thought leadership. Utilization of LinkedIn’s more advanced and “active” features is also low, suggesting that many advisors are missing an opportunity to leverage available efficiencies.

While LinkedIn has plateaued as the network of choice, Facebook use is increasing, and 80% of Facebook advisors maintain both a personal and a business page. In addition, 69% commingle personal and professional content on Facebook, suggesting that advisors are becoming more comfortable in mixing the two on social media, similar to individuals in other fields who rely on personal contacts to build business.

“ I find it the easiest social network to integrate with busi-nesses and colleagues. It’s much more professional than Facebook or Twitter.”

Bank advisor, male, age 55


Advisors report they are able to develop more personalized professional relationships with their clients on Facebook, receiving likes, comments, and shares for both personal and business communications in roughly equal measures. In addition, 31% are using paid promotion to boost content views, with 29% having created sponsored ads. Ultimately, Facebook may be providing advisors a better opportunity to “humanize” their personal brand than LinkedIn, allowing both natural market and business contacts to interact with them on a more personal level.

The Twitter advisor




$95M AUM


Top 3 activities 84% Tweeting 72% Liking tweets 70% Following

Twitter use among advisors is unique in that while 44% of advisors using social media use Twitter, only 12% use it as their primary business platform, suggesting that a majority of users consider it to be supplementary in nature.

Twitter users are active: 57% use it daily, compared with 37% who are daily LinkedIn users. This year, we see increases for Twitter users enhancing current relationships (from 49% to 59%) and cultivating prospective clients (from 43% to 54%); the ranges for these activities are similar to Facebook and higher than LinkedIn. Although advisors report compliance restrictions around Twitter direct messages (DMs) to be as restrictive as in previous years, the data points to more one-on-one communication by advisors with their clients via Twitter.

Some advisors are still not using social media

Fifteen percent of advisors surveyed still don’t use social media for business. While business use of social is highest among advisors under age 30 (97%), it is just 60% among advisors age 65 and older, who make up 8% of the total surveyed. Consistently over the past three surveys, over 50% of non-users say it is unlikely they will become adopters, with compliance still the primary reason given for non-use, followed by the preference for other mediums and the indication that “my clients and prospects don’t use social media.” But with social media use across the U.S. population generally believed to now be 70%–80%, it is unlikely that any advisor actually has a book with no social users in it, let alone would be able to somehow prospect effectively only among non-users.

“ Facebook gets the most traffic. Everybody, including their kids and mothers, is on Facebook.”

Bank advisor, age 55, $200M AUM

“ Twitter is my primary network, mostly because it’s a simple way to let my followers know what’s new. I can instantly write a little tweet.”

Bank advisor, 55


Measures of social success“ For the dollar, we get more content impressions on social media sites than any

other form of contact. I had a millionaire sign with me last week on Facebook.”

Wirehouse advisor, age 27

Impact: Social media is now broadly integrated into advisors’ business-building strategy. Adoption over the past four years has increased or held steady, and 80% of advisors report gaining new clients by using social media in 2016. Fifty-six percent say it has increased their business building efficiency “a great deal,” but only 18% say it has cut down on their traditional offline business building activities.

Business building: Advisors no longer appear to consider time spent on social media as separate from traditional business development activities, indicating that hours spent on social and traditional networking activities are about the same, averaging 10 hours a week each.

Time to close: For 85% of advisors, social media has shortened the time to close compared with traditional approaches, with 30% strongly agreeing with the statement.

Advisors were asked if social media has shortened the time required to convert a prospect to a customer compared with traditional approaches

Impact of social media on close rate

55%Agree somewhat

30%Agree strongly

56%say social media has increased their business-building efficiency a great deal


The successful social advisor

Profile: Advisors who have gained $5M+ attributed to social media use




$142M AUM

Networks used 85% LinkedIn 82% Facebook 73% Twitter

Social success: A function of situation, combination, and dedication

Bank and wirehouse advisors focusing on LinkedIn

Independent broker/dealers are leading by using Facebook

Some combination of “the big 3” — LinkedIn, Facebook, and Twitter — leads to greater gains.

Advisors using LinkedIn as their primary network in combination with Facebook or Twitter are seeing the greatest gains.

Those using more advanced features and tactics such as paying for promotion or premium access are seeing high return on their investment.

Older millennials and younger GenXers are leading the pack in assets gained, particularly those using Facebook as primary

Advisors seeing significant asset gains are active on social nearly every day.


Strategies for successNetwork fluency

Advisors using LinkedIn or Facebook as their primary social network who actively engage in more advanced features are seeing significant gains when compared with similar advisors who stick to the basics. Notably, advisors who adopt multiple advanced features, including paying for premium access or content placement, are far exceeding the asset gains of their colleagues who are taking a more passive approach to social networking.

LinkedIn success factorsLinkedIn “Experts” using 10 or more features, along with advanced features like posting network updates and sending InMail, are seeing the largest gains.

Feature adoption Number of features used Assets gained

LinkedIn feature Those who gained assets Those who did not gain assets

Novice 1–3 4–6 7–9 10–12

Expert +13 Avg Mdn

Accept connections 71%66% 36% 68% 83% 90% 97% $3.8M $0.7M

Request connections 58 48 18 46 67 84 93 4.1 0.8

List my company/firm on my profile 67 45 23 52 82 82 94 3.9 0.9

Follow companies 59 33 14 48 61 74 91 4.4 0.9

Display skills 57 37 24 34 64 80 96 4.0 0.9

Join groups 53 32 12 32 58 83 89 4.6 0.9

Fill out all possible areas of my profile 50 31 12 34 54 65 95 4.2 0.9

Like, comment on, or share others’ network updates

45 24 6 22 47 70 95 4.8 1.0

Send InMail 35 22 11 19 34 53 71 5.5 1.0

Upload photos 36 22 5 16 46 49 75 5.4 1.3

Indicate interests 48 19 8 22 46 72 93 4.9 1.5

Post network updates 43 8 6 22 28 59 88 5.2 2.0

Write recommendations 41 12 11 18 38 48 85 6.0 2.0

Request recommendations 31 6 2 12 25 37 76 6.0 2.2

Use Advanced Search to prospect 41 9 7 21 28 62 81 6.3 2.7

Post to groups/pages 38 5 1 10 29 63 85 6.9 2.9

Publish long-form content 22 1 0 13 10 27 53 7.7 3.3


Facebook success factorsSurvey data shows that use of paid promotion significantly increases the assets advisors reported gaining via social media

Feature adoption Number of features used Assets gained

Facebook feature Those who gained assets Those who did not gain assets

Novice 1–3 4–6

Expert 7+ Avg Mdn

Like companies, brands, or individuals 63% 52% 19% 74% 98% $3.7M $0.9M

Accept Friend connections 6047 25 66 93 3.5 1.0

Like, comment on, or share content 65 39 23 73 94 3.6 1.0

Post personal content 37 33 19 32 72 3.7 1.0

Post business content 67 60 37 71 98 4.0 1.0

Set up a business or company page 56 39 31 50 94 4.6 1.2

Request Friend connections 47 34 19 42 88 4.5 1.4

Create sponsored ads 29 29 16 26 52 4.4 1.6

Use paid promotion to boost content views 33 11 12 27 65 5.1 3.0

Paying for social

As seen in the above table, advisors who invest in paid promotion on Facebook are seeing average and median asset gains far above the group benchmarks. Paid promotion on Facebook is cheap and easy: Advisors can boost content or create sponsored ads for nearly any budget, pay for it with a credit card, and even complete the process via their firms’ compliant middleware platform. Firms who enable paid promotion on Facebook are at the leading edge of the compliant use of social media for business building and hold a strong advantage over other firms.


LinkedIn presents a different opportunity for the advisor who sees the value in social media investment. The “world’s largest professional network” offers Premium mem-berships tailored to various segments (job seekers, recruiters, business professionals), and an ultra-premium Sales Navigator membership that unlocks and tailors delivery of LinkedIn’s “walled garden” of rich data for subscribers.

Of advisors surveyed using LinkedIn as their primary network, 33% have invested in a Premium account. Of those, 88% are using LinkedIn Sales Navigator — a product whose annual cost can exceed $1,500.

Business results: LinkedIn account levelAssets gained

Have gained assets Average Median

Free account 74% $3.6M $0.9M

Premium account 77 3.9 0.9

Sales Navigator 93 7.6 4.3

While LinkedIn’s Premium offerings do provide a more robust feature set, including greater search parameters and volume, the lift provided is marginal. By contrast, advisors using LinkedIn Sales Navigator are seeing notably greater asset gains and success rates.

Adding Twitter boosts assets gainedOnly 12% of respondents named Twitter as their primary social network, but advisors who add Twitter as a second or third network – and stay active on it every day – are showing greater gains.

Monthly usage

10x to < 30 30x+

Assets gained

Social network for business Average Median Average Median

$4.0M $1.4M $4.4M $0.9M

4.0 0.9 6.7 3.4

5.6 2.7 6.9 3.6

5.0 2.8 7.3 3.9

3.5 3.0 3.8 0.9

3.0 0.9 5.5 2.4

4.0 1.0 5.9 2.9

4.1 1.0 6.0 2.7

Among advisors using LinkedIn or Facebook as primary network who have gained assets via social media


ConclusionAs social media platforms continue to proliferate and evolve, a presence on social media is now “table stakes” for advisors. There was a time when a calling card featured only a name with a promise to return. Today’s double-sided, multi-line business card contains multiple online addresses and phone numbers, allowing clients to interact when, where, and how they prefer.

Advisors who are active on social networks have an advantage and are seeing the greatest gains in AUM. As participation on the social playing field levels, education and training, along with firm-level support of advanced features and paid promotion and participation, will become increasingly key to advisors’ success.

With content and communication so critical in today’s market environment, advisors need to do more than pepper clients with information. Used efficiently, social allows them to communicate and support clients in a way that is comfortable for both and that builds and strengthens relationships. Having an advanced social media strategy and tools will allow advisors to put their best foot forward in an increasingly competitive environment.

Download the paper at putnam.com/advisorsAREsocial

Methodology

The 2016 survey, conducted online in July in conjunction with Brightwork Partners, included 1,018 financial advisors across the United States who have advised retail clients for at least two years or more. Ages of those polled vary from 22 to 80. The sample includes newer advisors to the well-established, working across channels from independent and regional broker-dealers to nationwide planning firms, wirehouses, insurance firms, and RIAs. Advisors were queried about AUM and assets gained via social marketing in ranges; median and average samples are based on range midpoints.

https://www.putnam.com/advisorsAREsocial?ref=EO288.pdf

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Partner with PutnamLearn how to use social media to prospect, get referrals, and build your brand. Start using productivity apps, mobile devices, and technology to improve efficiency. Your Putnam team can work with you one-on-one in person, office wide, or via webinar to deliver social media and technology training.

Training for advisorsGet Started with LinkedIn Recommended for those who are new to LinkedIn, or who have set up a profile but are using LinkedIn passively. Receive personalized instruction on:

•Setting up and optimizing a profile

•Writing a great summary

•Privacy settings

Get Started with LinkedIn

Advanced LinkedIn StrategiesAdvisors with established LinkedIn networks who want to actively use LinkedIn for prospecting and communication will benefit from this session. Topics include:

•Identifying your best prospects using advanced search

•The value of alumni and Second-level connections

•Third-party prospecting sites

LinkedIn Privacy SettingsThis session is for those who want an in-depth overview of LinkedIn’s privacy settings, and how they impact profile visibility. We will discuss:

•How to control who can see what on LinkedIn

•Pros and cons of connecting with competitors

•Fine-tuning communication and notification options

Get Started with TwitterA single tweet can move the market in an instant. Learn how to use Twitter as a communication platform and source of information. We will cover:

•Setting up a Twitter account and developing a daily routine

•Searching for relevant conversations using hashtags

•Staying up to the minute with current market events

Get Started withTwitter

To learn more, contact your Putnam Wholesaler or call Putnam Dealer Marketing Services at 800-354-4000.

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Using Technology to Advance your Practice This informal session is for those who have embraced tablet and mobile hardware and want to leverage them for a competitive advantage. Learn about:

•Essential productivity apps for mobile devices, including FundVisualizerT M

•Tablet and mobile phone tips and tricks

•How to stay connected when you’re out of the office

Literature•Social Media Playbook for Financial Professionals

•LinkedIn Playbook for Financial Professionals

•Optimizing Your LinkedIn Profile

Social Media Playbook

Applying best practices to your business

Playbook for Financial ProfessionalsApplying best practices to your business

Optimizing your LinkedIn ProfileGrow your professional network by fine-tuning your public persona

All other company, product, and service names may be trademarks or service marks of others, and their use does not imply their endorsement of, or an association with, this program. For illustrative purposes only.

Prepared for:

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•Building your network of professional connections and referrals

•Finding your next, best customer using LinkedIn

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•Leveraging a parent’s professional network to help find alumni who can give a recommendation

•Finding internships in specific locations and industries

•Building your professional network on LinkedIn as a young alumnus

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