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Why Asset Managers Need to Invest in Social Media NOW!

By Steven Miyao

I firmly believe that asset managers need to invest in a social media strategy for three reasons:
1. More advisors use social media than use asset managers' advisor sites
2. Personal and professional use of social media is converging
3. The current benchmark for asset managers' social media use is low - it's time to experiment

I've used our latest FA Vision research, cited in this blog entry, to explore these three reasons.

More advisors use social media than use asset mangers' advisor sites

Financial Advisors spend more time online now than ever before. They average 13.2 hours/week online (not including e-mail) for work related use and spend an additional 4.9 hours/week online for personal reasons. Most asset managers' advisors are infrequent visitors to their firms' advisor sites. However, 77.5% of advisors use social media sites at least once per month (up from 74.5% last year) and 20% use them daily.

Right now firms reach a limited number of advisors through their sites. If firms invest in their social media strategies, there is the potential to connect with a much larger group of advisors. Only 48% of firms claim any social media presence and fewer than 20% intend to develop a presence in the next twelve months. This is your opportunity to shine and to build a sustainable, competitive advantage.

Personal and professional use is converging

The father of one of my son's good friends is also one of my clients. We connect on Facebook in regards to our kids' school activities and after school events, but we also share industry articles and links. Social media is clearly starting to blur the line between professional and personal networks. We co-mingle colleagues, clients, friends, family, and those who share our varied interests within our social networks.

Let's take a look at my Facebook feeds. I "like" and connect with asset managers as well as my friends and colleagues. This enables me to see what is going on with my personal connections as well as to follow what Bill Gross, Mohamed El-Erian and other industry thought leaders have to say.

The same is true for financial advisors who are using social media sites for both personal and professional purposes.

The benchmark for social media is low - it's time to experiment

Most asset managers' social media implementations are still quite rudimentary. Only 20% of asset managers have a Facebook presence, 39% a LinkedIn presence, 24% a Twitter presence, and fewer than 20% intend to develop a presence in the next twelve months. This data indicates that the social media benchmark in our industry is still very low. Still, there are a number of asset managers who are working on building deep interactions with their advisors through social media, and are even starting to segment content to advisors based on product preferences.

There is opportunity in the number of people who "Like" an asset management Facebook site (PIMCO 2,284, Putnam 323) and who follow asset managers on Twitter (PIMCO 4,519, Putnam 871). Now, when only a few advisors are watching, is the time for asset managers to experiment with this medium. Once tens of thousands of advisors are connected with asset managers on Facebook, firms will have little room for taking chances.

Firms should be building the appropriate internal processes, including compliance, and working on the cultural adoptions to allow content delivery through social media. In the next 12 months the expectations and the usage of advisors is going to be significantly higher. Firms will no longer be able to infrequently post general investment content in order to gain the attention of the advisors.

Develop your social media strategy now

Now is the time to build your social media strategy