How Advisors Should Explore the Social Media Universe

"They're thinking about social media as traditional media, which is 'one way'; that is, they're talking at people. For example, advisors are putting their brochures online," says McIlwain. "But social media is a dialogue, where it's important to listen first and talk second. Be sure to show valuable content, but don't keep talking about 'me, me, me!'"

Another misstep is advisors' spreading themselves too thin—joining LinkedIn, Facebook, Twitter, Google Plus—but then discovering they don't have time to manage all those networks properly.

"So they turn into ghost towns," McIllwain remarks.

Time Management

How much time should advisors carve out for business social media? Many experts and users agree that, on average, 30 minutes a day is all it takes to be effective. That half-hour may of course be split into morning and evening sessions or short bursts during the day.

Mike White maintains, however, that "there is no one-size-fits-all answer" to this question. "Some of our advisors have a discipline and plan out posts almost like an editorial calendar." Others, with a looser strategy, devote less time.

At Morgan Stanley, "each advisor that uses social media several times a day makes their own decision on a daily basis. Between 15 and 30 minutes sounds right," Chtchedrine says. "Some of our advisors on LinkedIn don't use it proactively very much—it's a tool for them to be found [by others]. But for an advisor who's looking to take advantage of the power of the networking part of the platform, 15 to 30 minutes [seems good]. We recommend that they actively go through their connections to find people of value that they'd like to meet and that they look up a prospect's profile before they meet with them to become [acquainted with] their background."

Swift advocates "setting a schedule and sticking to it. If advisors find themselves surfing the Web, and one thing leads to another, and time is passing, and they're not paying attention to what they need to get done, they're in the danger zone."

Ideally, the FA's approach to social media should be a mix of active and passive strategies.

"Social media is really good when it's an interactive give and take, not just a one-way promotional tool," Swift says. "If it's only passive, it can begin to seem like a one-way bullhorn with purely outbound commercial messages. People will tune out over time."

Further, there needs to be a mix of canned, curated and custom posts. Canned content is created by and available for purchase from third party companies such as Bill Good Marketing and MarketPro. Curated content consists of interesting articles that you've read and want to share. Custom content is original pieces you have written. In creating such posts, be sure to steer clear of compliance department verboten words like "return," "rate," "guarantee" and "expertise." And never talk about or recommend specific products.

The idea is that "you're educating—and then earning the right to that face-to-face meeting," notes McIlwain.

Off the Phone

One of the most welcome aspects of social media: It is fast becoming a replacement for cold calling.

"Social media has become the primary tool for prospecting. It's a complementary tool for taking over cold calling because it's far more effective," Chtchedrine says. "With cold calling, you have no idea who you're calling. Advisors are far more likely to get that meeting [with a prospect] if they have a warm introduction or some sort of information about the person whom they contact. That's where social media is an incredibly useful tool."

Client referral is another area where social media is a boon to both advisor and prospect. According to White, 90% of folks referred to an FA go straight to the Internet to check them out. Hence, social media-savvy FAs are managing to best advantage their brand as it appears online.

"Advisors can do that in an impactful way," White says. "We've had great stories of advisors who have had better success with referrals because they've thought about how their brand comes across on Twitter, Facebook or LinkedIn before a prospect has even met them."

Some FAs use social media solely as a passive device to, for example, check out their top clients' Facebook pages for life events or family vacations—then they determine how they can provide good advice around these.

Another opportunity: To get more bang out of social media, advisors might look into paid and sponsored content. This option was introduced as a result of LinkedIn, Facebook and Twitter's need "to monetize in order to get a return on their shareholders' investments," McIlwain says.

Consequently, the outlets are cutting back on organic (free) exposure and asking users to pay to boost their posts, thereby gaining greater exposure. The cost is "super-inexpensive," according to McIlwain.

She continues. "We've seen a huge shift from organic social media—posting and sharing content—to paid and sponsored content.

"This is a tremendous opportunity for advisors to target a highly niched market," says McIllwain. For instance, one advisor recently ran a targeted ad campaign aimed at NCR workers after the company announced 20,000 employee-pension buyouts. The ad was embedded within the feed of that targeted audience.

In the grand scheme, social media's role is a robust extension of the advisor's traditional sales and marketing activities.

"Social media isn't a silver bullet. It's a function of what the advisor is otherwise doing and how they want to use it in their communication plan," White says. "If clients and prospective clients are expecting to find their advisors in these [online] places, it's a mistake for firms not to figure out how to do that in a compliant way. We've invested a fair amount of time and money in our program. It's been well received."

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