Social media helps gain clients, but changes relationships, study finds

Putnam research reveals more frequent, but less personal, adviser communications

Apr 3, 2018 @ 4:08 pm

By InvestmentNews

Social media has changed adviser-client relationships, helping advisers attract and retain clients, but leading to fewer face-to-face meetings or phone conversations, a study by Putnam Investments finds.

In its fifth Social Advisor Study, Putnam found that 86% of advisers who use social media for business reported it helped them gain clients, up from 80% in 2016. The vast majority of those who gained clients (88%) report that their use of social media has changed the nature of their client relationships a "great deal."

Two-thirds (67%) of those surveyed said they found it is now easier to share information with clients, and 59% reported having more frequent communication with clients overall, although 38% said they connect less frequently by phone or in person.

More than half (54%) of advisers surveyed said they now have a better professional relationship with their clients, and 50% said decision-making is faster and easier.

Nearly half (46%) of advisers surveyed claim to be social media "experts," while 41% say they "just get by," 5% are just getting started and 2% said they would like to get started but need help.

Putnam said it surveyed 1,014 financial advisers.

LinkedIn is overwhelmingly the network of choice of advisers for their business, with 73% reporting usage compared with 56% who use Facebook and 46% who report using Twitter for business. Use of other platforms for business is also growing: 42% of advisers indicate they use Yelp, 39% use YouTube and 34% use Instagram for business. Although LinkedIn continues to be the leading business site, advisers say they use Facebook an average of 22 times per month, versus only 16 for LinkedIn.

According to the study, fewer than 3% of advisers reported that they didn't use sociala media, either for professional or personal business. Advisers not using social media, on average, are 60 years old, have 24 years of industry experience and have $69 million in assets under management. By comparison, advisers who use social media for their business have on average $89 million in assets under management. Advisers who use social media for personal reasons only have $85 million in assets under management, on average, "suggesting that even a casual social media presence may result in additional business," Putnam said.

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