Financial advisors are using social media more than ever, and they’re winning more business than ever with it. That’s the top-level takeaway from an extensive survey of advisors that LinkedIn has just carried out in conjunction with FTI Consulting.
The survey findings are being released in connection with the LinkedIn Financial Services Summit underway today in New York City. Later in the day we’ll be reporting more from the Summit—where Socialware CEO Chad Bockius is a presenter—but we wanted to share some of that data with you now.
Advisors Use Social Media Regularly, LinkedIn Most of All
LinkedIn’s survey polled 463 financial advisors in the United States during February 2012 — including 139 advisors from wirehouses, 209 from broker-dealers, and 115 RIAs. Across all categories, 71% of advisors said that they are using social networks to do business. Among those advisors, LinkedIn has an overwhelming lead over other networks: 91% of advisors on social media use LinkedIn, whereas no other network is used for business by even one-third of advisors.
This is reflected in the large population of advisors on LinkedIn: more than 180,000 U.S. financial advisors use the network. They also use LinkedIn more frequently than any other platform — 53% of advisors on LinkedIn use the network at least once a week, and 74% use it at least once a month.
Advisors Are Using Social Media More than Ever
LinkedIn’s overall growth rates have been impressive. The network now has north of 180 million members, with millions more joining each month. The advisor population is also using LinkedIn more regularly. In fact, more than 60% of the advisors polled have increased their business use of LinkedIn over the past year. And while only 29% of advisors say that social media plays a significant role in their marketing efforts today, more than half — 52% — expect social media to play a significant role in their marketing a year from now.
Advisors Are Winning Business through Social Media
Many of the advisors using social media are seeing real business results from it, in terms of both clients and assets:
- More than 60% of them have used LinkedIn to gain new clients.
- Of that group, 32% used LinkedIn to bring in $1 million or more in assets under management.
The successful advisors are also using LinkedIn across many facets of their business lifecycle, especially during the early phases:
- “Improving the effectiveness of my referral network”: 75%
- “Cultivating client prospects”: 72%
- “Building my brand identity”: 61%
- “Enhancing current client relationships”: 55%
Increasing numbers of advisors are also using LinkedIn to expand their own professional knowledge and to share thought leadership with their connections.
High Net Worth Investors: Untapped Potential for Advisors and Firms
LinkedIn has also published the results of a separate survey of more than 600 high net worth (HNW) investors in the United States and Canada. That survey has serious implications for the way that financial advisors address the HNW market using social media.
One key finding from this survey is that more than 5 million HNW investors are actively using social media to help them make financial decisions. Of that group, 73% use LinkedIn — and they use it much more than Facebook or Twitter for having professional discussions. The survey also revealed that these investors tend to be much more active in their investment habits, doing more research online and making more trades.
Two more findings about these HNW individuals stood out:
- Only half of the HNW investors active on LinkedIn have financial advisors, whereas about 80% of HNW investors not active on social media already have advisors. That could mean a huge prospecting opportunity for advisors using LinkedIn.
- Of investors who already have advisors and use social media, more than half (52%) say that they would like to interact with their advisor using social media — yet only 4% of them actually do. Again, this could mean a major opportunity for advisors to build rapport to retain existing clients and increase their assets under management.
Advisor Use of Social Media Keeps Growing
Whether we look at HNW individuals or the broader population, it’s clear that investors — like virtually all other demographic groups, young and old — are increasing their usage of social networks. Savvy advisors are likewise using those networks to build their books of business, and they’re doing it more actively and in greater numbers than ever before.
Stay tuned for more on this subject and related ones as the LinkedIn Financial Services Summit continues.