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Experts offer tips on how financial advisers can optimize social media

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Modern Money

There are financial advisers who use social media and there are financial advisers who use social media well.

The experts assembled at the SIFMA Social Media Seminar in San Francisco on Thursday agreed that social media represents a huge opportunity for financial advisers, but it is an opportunity that must be managed carefully.

Representatives from LinkedIn, Facebook and Twitter as well as individual advisers and executives who steer social media strategy at major firms like Wells Fargo and LPL Financial came together to discuss the state of social media in financial services and how advisers can use it to boost their business.

Why go social?: John Ploumitsakos, Twitter’s Director of Online Sales, described the value of social media in terms familiar to advisers. “Building up your follower base is like building up your investment base. It’s like an annuity.”

“Content is currency in the social world”: The experts agreed that a firm’s messaging across the various social media networks needs to be crafted carefully. One of the best ways is to build trust by offering consumers/clients quality content. What constitutes quality content? Kittens and dancing babies are cute, but they do nothing to help build a reliable brand. Jennifer Grazel, the Global Head of Category Development-financial Services for LinkedIn, said the formula for quality content is simple: Authenticity + Relevance = Trust.

Keith Watts, the Financial Services Business Lead for Facebook, echoed Grazel’s sentiment. “Good content is good advertising. Bad content is bad advertising,” Watts said.

Social media as a vetting tool: Grazel said leveraging social media is critical for advisers because consumers now use social media to vet financial advisers and the advice they offer. They also use it to figure out if an adviser is the kind of person with whom they want to do business. “Seeing what someone does on social gives me more trust in them as a person,” explained Facebook’s Watts.

Rebuild Trust: Numerous speakers noted that social media represents an opportunity for financial services firms to rebuild the trust that eroded during the financial crisis. “Brands can humanize themselves via social media,” said LinkedIn’s Grazel.

Don’t overlook employees: Compliance concerns stunted the early adoption of social media at most financial services firms. Now firms need to shift 180 degrees and encourage employees to become active on social media so as to elevate the firm’s profile. Melissa Socci, SVP for Brand and Marketing Delivery at LPL Financial says the best way to amplify a social media initiative is to recruit the involvement of senior executives. Employees throughout the firm can also be leveraged, so long as they are trained on best practices and educated about the goals of the social media strategy.

Social media can pay operational dividends: Renee Brown, SVP and Director of Social Media for Wells Fargo, says one way to help get buy-in from senior management is to report on volume. Executives are often surprised by just how much interaction their social media programs have with clients. Brown said one example of social media reducing operational costs would be for companies that have call centers for customer service. Call volumes are going down as that interaction is replaced by online communications.

Here come the analytics: Measuring the effectiveness of social media can be tricky as it is often hard to pinpoint the interaction or platform that led to closing a sale or signing a new client. However, the experts said that is about to change as analytics tools are being fine-tuned to better track the effectiveness of social media.