Financial services professionals are using social media for personal and business use and doing their best to work within industry practices and company policies, according to a survey on social media use conducted by LederMark Communications. “Younger professionals are leading the charge. Many are finding social media to be a worthwhile tool for building business relationships and promoting their practices,” says Gerri Leder, president of LederMark Communications.
Younger vs. older users
Industry watchers should realize that the generation gap in social media networking will impact sales practices in the years ahead.
- 85% of financial services professionals under 50 are utilizing social media, compared with half of their older counterparts.
- When asked if their social media presence has led to doing business, more than 40% of professionals under 50 said yes vs. 19% of those 50 or older. They prefer LinkedIn for business and Facebook for personal use; however, both social networks allow them to be more visible, have a platform for questions and answers, and reconnect with old friends, introductions and referrals — all cited as how social media helped bring in business.
- The younger group predicts big shifts in business development practices as a result of social media use: fully 86% of those under 50 and over half of 50+ professionals agree that social networking will be an important business development tool within five years. In fact, none of the respondents under 50 (0%) claimed that social media wasn’t worth their time.
These figures point up the significant numbers of financial services professionals who will be using social media for their business in the near future and how important clear policies are regarding its use. “Younger advisors are positioning social media as a beneficial tool in building relationships that lead to new business,” says Leder. “Even their personal use of Facebook is leading to renewed relationships, referrals and introductions that lead to business. The separation of church and state – the lines between personal and business use – has been blurred.”
Use at national financial services firms
Users at national financial services firms, in particular, point to compliance concerns and restrictive company policies as impediments to business use. Most are allowed to create a profile (in some cases, only without identifying their firm), invite friends to their network and join groups. But they also express an interest in being allowed to go further, to ask clients and friends to recommend them, to use applications like SlideShare and WordPress (for blogging), to engage in discussions and link to their business web site. These activities, they report, are not permitted by their firms. And an additional significant number admit they don’t know which of the LinkedIn activities their company policies allow.
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National financial services firms: social media use |
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Rank |
Current useBottom of Form |
Desired useBottom of Form |
|
1 |
Create a profile with the name of employer identifiedBottom of Form | Ask clients and friends to recommend you on your profileBottom of Form |
|
2 |
Invite friends/colleagues/others to join your networkBottom of Form | Utilize applications (SlideShare presentations, WordPress, Google presentations, Tweets, etc.)Bottom of Form |
|
3 |
Join groupsBottom of Form | Engage in discussionsBottom of Form |
|
4 |
Link profile to your business web siteBottom of Form | Link profile to your business web siteBottom of Form |
|
5 |
Engage in discussionsBottom of Form | Join groups
Create a profile without the name of employer identifiedBottom of Form |
| Source: LederMark social media survey March 2010 | ||
“Compliance guidance is mixed,” says Leder. “Whether it’s a no-use policy, unclear parameters or daunting approval processes, there is frustration among those who want to utilize social media for their practice and do it by the book. This is where we hope these survey results can shed some light on not just the status of social media use, but the challenges and impediments remain.”
One national financial services firm user summed up the issue this way, “We are still working on it. The biggest hurdles so far are from senior executives that do not use social media and are trying to understand how it fits into the firm’s objectives…and legal, in reviewing policies they are unfamiliar with and denying our ability to use social applications on these grounds.”
The survey included 175 financial services executives from national financial services firms, independent financial advisors, regional firms, asset management firms and others. The largest groups of respondents were financial advisors/brokers (47%), registered investment advisors (12.4%) and marketing professionals (12.4%) from financial firms. The top sites used for business were LinkedIn, followed by Facebook, which also played a fairly large role in resulting business as well. Facebook was also the top site for personal use.
LederMark Communications, based in Baltimore, is a financial services marketing, communications and consulting firm, serving national, regional and local investment firms and can be found at www.ledermark.com.
