Whether tweeting and other social media platforms are the modern day version of cold calling is unclear, but some investment advisors are not taking a chance on missing out on the opportunity to win new clients online.
The 2010 Rydex|SGI Advisor Benchmarking annual study found that over 90 percent of surveyed RIAs expect both profits and number of clients to continue to increase during the remainder of the year. Of the 356 RIAs surveyed, 69 percent cited growth as their top priority. One way they are looking for that growth is through a social media presence.
Advisors say they are using sites like LinkedIn, Facebook, YouTube and Twitter to both secure new clients as well as communicate with existing clients. More than half of respondents believe social media will have a lasting impact on the financial services industry. LinkedIn seems to be the most popular among advisors, with 42 percent of advisors using the website. Twitter is still catching on, with just 13 percent of respondents saying they tweet. Maya Ivanova, research manager for AdvisorBenchmarking, says the social media platforms offer advisors a chance to network on a large scale.
Another benefit of social media is its cost: there is none. The mainstream platforms mentioned above are all free. And that's good news considering advisors in the Rydex study say they are not spending much more this year even though assets are up.
Mark Matson, founder and CEO of Matson Money, a network of financial advisors and investment coaches that manages $2.5 billion in client assets, says advisors are mistaken if they think having a basic website is enough. “Most advisor websites are electronic brochures. You need real content. Your retiring clients may not care if you have social media presence, but their kids and grandkids will,” he says.