Financial Advisors’ Use of Social Media Moves from Early Adoption to Mainstream

Financial Advisors’ Use of Social Media Moves
from Early Adoption to Mainstream
Advisors use a variety of social networks overall – but when it comes to
driving business, the overwhelming majority turn to LinkedIn

May 2012
Emily Friedman, LinkedIn
Neil Benedict, FTI Consulting

Introduction
In a mere handful of years, social media has fundamentally changed
how individuals and businesses communicate. Marketing
communications have shifted from one-way conversations to dynamic
social communities — thus transforming social media from a tangential
element of business strategies to a decisive game-changer.

Among financial advisors in particular, social media has quickly
become a critical business tool. With a business that is fueled principally
by networking, advisors are increasingly integrating social media as a
core element of their marketing efforts. This comes as no surprise, given
the adoption rates of their prospective clients: According to Forrester
Research, two-thirds of U.S. online adults with an investment account
now have social network profiles.

Facing a competitive disadvantage of being left behind by early-
adopter peers, advisors are inclined to improve their understanding
of how best to leverage social networks for business. However, with
In order to better understand the role of obstacles like securities regulations and company compliance policies,
social media and networks in the financial financial advisors arguably have more barriers to adoption than
services sector, LinkedIn partnered with professionals in other industries. Despite these challenges, advisors are
FTI Consulting to conduct a finding ways to effectively work within the parameters of compliance.
comprehensive survey of financial advisors
in the United States. The study has For financial advisors who use social media, LinkedIn’s platform is key
revealed new insights into how financial — particularly due to its professional context and growing audience
advisors are leveraging social media to of valuable financial consumers. Perhaps more significant, however, is
drive business, often under restrictive that advisors are able to leverage the LinkedIn platform in a way that
policies. Findings from the research also parallels and enhances their traditional business cycle. Simple
show a number of best practices for opportunities, such as utilizing one’s full extended network for possible
successful use of LinkedIn to support leads, provide advisors with now imperative resources to be more
ongoing business needs. efficient and effective.

1

With continued empowerment and education, advisors will be better
equipped to contend with the leading marketing strategies of their
peers and succeed in a highly competitive marketplace. Whether part of
a wirehouse, brokerage firm, or working independently, advisors have
expressed unequivocally that their adoption of social media is here to stay.
With this firmly established, advisors will undoubtedly be looking to make
the most of the opportunities ahead.

Key Findings

7 IN 10
Seven in 10 financial advisors are already using social networks for
business purposes:
• Adoption rates will only continue to grow, as more than half of financial
FINANCIAL ADVISORS ARE ALREADY advisors expect social media to play a significant role in their marketing
USING SOCIAL NETWORKS FOR efforts in 2013 — this represents an 80% increase year-over-year.
BUSINESS PURPOSES
While most advisors report that their social media use is restricted,
company compliance policies have not substantially deterred overall
adoption of social media:
• Company policies are far more restrictive for wirehouse advisors than for
either broker-dealers or registered investment advisors (RIAs), which is
to be expected given the greater sensitivity to regulatory implications
among the larger financial institutions.

When using social networks for business purposes, nine in 10 financial
advisors turn to LinkedIn:
• Among advisors who have used at least one social network for business
in the past year, 91% have used LinkedIn, compared with less than a

9 IN 10
FINANCIAL ADVISORS WHO USE
third each for Facebook, Twitter and Google+.
• Contributing to this preference are features and tools unique to the
LinkedIn platform that effectively complement and amplify advisors’
traditional efforts to grow their book of business.
SOCIAL NETWORKS FOR BUSINESS
TURN TO LINKEDIN More than three in five advisors who use LinkedIn for business have
increased their business usage of the site over the past year:
• Key factors contributing to this increase include an improved
understanding of how best to leverage LinkedIn for business and the
presence of valuable target audiences on the site.

Financial advisors leverage LinkedIn for client prospecting efforts with
highly successful results:
• In the past year, more than three in five financial advisors who used
LinkedIn for client prospecting successfully gained new clients as a result
— with nearly a third of these generating $1 million or more in assets
under management.

Successful financial advisors have proactively utilized LinkedIn
throughout their acquisition process, particularly through the use of
networking tools:
• Financial advisors who have successfully gained clients on LinkedIn are
three times as likely to have leveraged the site’s search tools to find
clients or to have requested introductions to new leads.

Though advisors generally do not report social media activity outside
the parameters of their policies, they would like to use LinkedIn for a
greater number of business purposes than they have been able to in
the past:
• Advisors are especially interested in leveraging the platform more for
knowledge-sharing activities, highlighting the trust factor associated
with LinkedIn.
• Half would choose LinkedIn over Facebook, Twitter or Google+ to
cascade thought leadership if policies were not an obstacle, but only one
in five has been able to do so.

2

Financial advisors report high adoption levels of
social media for business
“ Social media allows more Client relationships move to social networks
opportunities for connection. It is no surprise that a large majority of financial advisors are using
That is a financial advisor's social media to advance their business prospects. Hundreds of millions
of people around the world already use sites like LinkedIn, Facebook
bread and butter.” and Twitter, making social networking an increasingly vital element for
building and interacting with communities of potential clients. With a
Broker-Dealer
projected 19.2% increase of global social media users in 2012, this
universe will only get bigger: At the current growth rates, 25.8% of
the world’s population will use a social network at least once a month
by 2014.1

Social media presents a dynamic and multi-faceted channel for financial
advisors, whose business relies on networks and referrals to win and
Figure 1 retain clients. By centralizing existing client contacts, social networks
offer a cost-effective way to leverage this otherwise stagnant
Overall Business Use of Social information. Through simple actions such as conducting keyword
Networks searches or checking connections in common, advisors can grow and
capitalize on their network to generate leads and referrals.
Among all financial advisors
Financial advisors can also demonstrate expertise in discussion forums or
through membership in industry groups on social networks, in addition to
sharing their credentials and differentiating their business. In an industry
where the size and quality of relationships are crucial and where
traditional sources of information can quickly become stale, a growing
71% number of advisors are drawn to the value of social networks.

Social media will drive most advisors’ marketing efforts
29% A majority of financial advisors already use social media: Nearly three
out of four have used at least one social network for business in the
past year (Figure 1).2

Currently, about a third of advisors report that social media plays a
significant role in their marketing efforts (29%), but this is poised for a
No social Use at least substantial increase in the near future: More than half expect social
networks one social media to play a significant role in their marketing one year from now
used for network for (52%). At this rate, significant business adoption will quickly become
business business mainstream among financial advisors.

The growth potential for social media in the financial services industry
undoubtedly is encouraged by these existing adoption rates among
financial advisors. As awareness and understanding of social networking
strategies continue to grow, more financial professionals will
incorporate these tools into their business and, in turn, expand the
reach of their networks.

“ I believe [social media] is
becoming a more accepted way
of driving new business and
referrals. The financial services
industry is starting to realize the
benefits [of social media] and
will eventually allow more
access to it.”
1 eMarketer, “Worldwide Social Network Usage: Market Size and Growth Forecast,” March
Wirehouse advisor 15, 2012

2 Among all respondents established as qualified financial advisors, including those later
screened out for lack of business social media use

3

LinkedIn is the preferred social platform among
financial advisors
If advisors are using at least one social network for business, they are,
on average, more than three times as likely to use LinkedIn compared
with any other social network (Figure 2). For personal use, it is clear that
Facebook remains dominant, as 71% of advisors who use the site report
strictly personal usage. Overall, however, LinkedIn is the most widely
utilized social network among financial advisors, with 78% using the site,
just edging out the 75% who use Facebook (Figure 3).

Figure 2
Social Networks
Used for Business 91%
Among financial advisors who
use at least one for business

32%
28%
22%

LinkedIn Facebook Google+ Twitter

Figure 3
Overall Social Network
Usage for Business/
Personal Purposes LinkedIn
83%
Business
17%
Personal 78% use LinkedIn
Among all financial advisors

Facebook 29%
Business
71%
Personal 75% use Facebook

39% 61%
Twitter Business Personal 38% use Twitter

Google+ 50%
Business
50%
Personal 37% use Google+

“ I have had prospects look at A leading reason for advisors’ overwhelming business network
my LinkedIn page during their preference is that LinkedIn complements and enhances the way financial
advisors grow their book of business. Traditionally, financial advisors
research for a financial depend on referral networks and cold calling to gain new clients; they also
professional. LinkedIn has rely on frequent interactions with existing clients to deepen current
created a forum where I have relationships. Especially for newer advisors, it often can take years to build
been able to differentiate my an effective network. By leveraging LinkedIn, advisors can streamline and
amplify these efforts, using a single platform both to gain new clients and
business and for prospective to deepen existing relationships.
clients to see how I am different
from the run of the mill
financial service providers.”
Broker-Dealer

4

Figure 4
Social Network Use by Business Purpose
How many have used each network for each business purpose? (Among financial advisors who use at least one social network for business)

LinkedIn
71%
Facebook
Twitter
Google+

42% 42%

34%
31%
30%

20%
17%
16%

12% 12% 11% 11% 11%
8% 9% 9% 8%
7% 8% 7% 7% 7%
6%
5% 5% 5%
2%

Making Improving the Building my Cultivating client Expanding my Enhancing current Cascading thought
professional effectiveness of my brand identity prospects professional client relationships leadership in
connections referral network knowledge base my field

Not just for connecting: Advisors leverage LinkedIn
throughout their business process
Financial advisors who use at least one social network for business are
not only more likely to use LinkedIn overall, they are also more likely to
use it for each of their specific business needs. Advisors are especially
likely to use LinkedIn to make professional connections, improve their
referral network and build their brand identity — more so than
Facebook, Twitter and Google+ combined (Figure 4). Given the site’s
“ Through referrals and making professional context, advisors have also used LinkedIn as a forum for
connections [on LinkedIn] I have trusted information sharing, both to expand their professional
been able to acquire various new knowledge and to cascade thought leadership.
clients, both locally and in other
Since actions involving content creation have a greater potential for
markets. [Using LinkedIn] allows compliance issues, advisors seem to be exercising caution in these areas.
for expanded brand knowledge However, as social media continues to drive marketing efforts, advisors
without the necessary travel and will benefit from company tactics that minimize the effects of restrictive
store level marketing.” policies, such as the implementation of a middleware system.

Registered investment advisor
Usage of LinkedIn varies by type of advisor
When looking at LinkedIn usage across different types of financial
advisors, those from wirehouse firms are comparatively more likely to
have utilized search or communications tools to prospect or seek
referrals to new clients. This could be because such networking tools
have been effective in helping advisors gain new clients, especially as
wirehouse advisors look to offset losses from the shift to independent
advisors in recent years.

5

RIAs, on the other hand, are more likely than other types of financial
advisors to use LinkedIn to expand their professional knowledge or
post information. Though RIAs generally benefit from less restrictive
compliance policies, they are less likely to have access to proprietary
research or similar business support that other advisors might receive
from their firm. Additionally, RIAs often do not benefit from the brand
name of a larger firm and are more reliant on individual brand building
efforts. As such, these advisors are keen to leverage the full reach of
their network on LinkedIn to effectively differentiate themselves from
competition and to stay up to date on industry insights that support
their business efforts.

New client acquisition is likely for advisors who prospect
on LinkedIn
• More than three in five financial advisors who have leveraged
LinkedIn to cultivate client prospects in the past year have
successfully gained new clients as a result (Figure 5).
• Those who are gaining clients on LinkedIn are bringing in big
Figure 5 business: Nearly a third have gained $1 million or more in assets under
New Clients Gained management, while 12% have gained $5 million or more (Figure 5).
Through LinkedIn
Has your use of LinkedIn for
prospecting helped you gain Corresponding gain in assets under management from new clients
new clients?

Less than
$500K 42%
62%
Yes $500K to
$999K
20%

$1M to
$4.9M
20%
38% $1M+: 32%
No More than
$5M
12%

Advisors use LinkedIn more frequently for business
Further solidifying LinkedIn’s dominant position in the sector, financial
advisors who use LinkedIn for business are doing so much more
frequently than users of other networks. While three-quarters of LinkedIn’s
business users are at least monthly users, fewer than half of Facebook’s
business users are using Facebook for business purposes at least once a
month – and fewer still among Twitter and Google+ users on their
respective networks.
“ I had been calling a prospective
client without any success over a Additionally, more than half of those who use LinkedIn for business do
so weekly, compared with less than a third of those who use Twitter or
two-year window. After Facebook for business (Figure 6). Interestingly, though Facebook is
connecting [with] him on nearly twice as popular as Twitter and Google+ in overall usage (Figure 2),
LinkedIn, he picked up the phone Facebook is used least frequently for business purposes.
of his own accord and said he
wanted to meet with me. After
that meeting, he became a client.”
Wirehouse advisor

6

Figure 6
Frequency of Social 74%
Network Usage Use network
48%
for business
Among financial advisors who purposes at least
use each social network, how once a month
37%
frequently do they use for
business?
27%

LinkedIn
53%
Google+
Use network
Twitter for business
37%
Facebook purposes at least
once a week
31%
20%

Figure 7
Usage of LinkedIn
Most business users of LinkedIn report increased usage
Among financial advisors who have gained year-over-year
clients & increased use
Across all advisors who have used LinkedIn for business purposes,
Has your business use of LinkedIn 62% report an increase in their business usage of the site over the
increased over the past year? past year, while only 4% report a decrease in usage.
When asked why they have increased their usage of LinkedIn over the
past year, financial advisors most often cite an active target audience on
the site and their own improved understanding of the LinkedIn platform:
• Three in five have increased their business usage of LinkedIn because
76% the people they are trying to reach are active on the site (61%).
Increased • Nearly as many have increased their usage because they now have a
better understanding of how best to leverage LinkedIn for business
purposes (57%).

21%
Same
It is possible that these trends reflect broader improvements in the job
market, or perhaps the increased adoption of company compliance
solutions such as middleware software. Additionally, educational
resources such as company or site-sponsored workshops likely have
contributed to the increase in understanding.
3% The presence of high-value prospects on social networks such as
Decreased
LinkedIn is a notable driver of increased usage among advisors,
especially as many investors seek financial advice on these networks:
• According to Forrester Research, two-thirds of U.S. online adults with
an investment account now have social network profiles.
• In addition to having a presence on social networks, these investors are
Top reasons for increased seeking help: Forrester notes that the percentage of investors who
business use of LinkedIn want advice from experts grew in the last decade, while the percentage
of investors who make all their own investment decisions fell by 30%.
AUDIENCE • Coupled with the fact that 40% of U.S. consumers who opened a

71%
SAY TARGET full-service brokerage account last year researched their choices online,
CLIENTS ARE ACTIVE it is clear that there is a strong audience-based motivation for advisors.
ON LINKEDIN
Usage trends among successful advisors reflect factors similar to those
driving use of LinkedIn overall. In addition to citing client activity and
EDUCATION better understanding of LinkedIn tools, advisors also consider LinkedIn to

66%
GAINED BETTER
be generally preferable for their needs compared with other social
UNDERSTANDING
OF LINKEDIN
networks (Figure 7).

PLATFORM

55%
FIND LINKEDIN'S
PLATFORM SUPERIOR
FOR BUSINESS

7

Successful advisors proactively leverage LinkedIn
Advisors who have gained new clients through the use of LinkedIn
are more often using the site with the intent of establishing and
growing a network of clients and referrals.

For example, successful advisors are twice as likely to have used the site
to improve their referral network and more than twice as likely to have
used LinkedIn to enhance client relationships (Figure 8). This
demonstration of return on investment emphasizes the value of LinkedIn
as a cost-effective and dynamic alternative to traditional lead generation
tools such as mailing lists and advertising.

Generally, advisors who have had success gaining clients on LinkedIn
have been more active in leveraging the platform during the initial
stages of the acquisition cycle. In terms of specific actions taken, more
than three times as many successful advisors have used search tools to
find clients, request connections or get introduced to new leads
compared to those who haven’t gained new clients. Additionally, more
than twice as many have requested referral introductions or managed
referral contact information through LinkedIn.
Figure 8
Reasons for Using LinkedIn
For which of the following business
purposes have you utilized LinkedIn?

Improving the 75%
Gained clients from
LinkedIn
effectiveness of my 2X as likely
referral network 37%
Have not gained
clients from LinkedIn
Cultivating 72%
client 3X as likely
prospects 26%

Building 61%
my brand
identity 42%

Enhancing 55%
current client 2.5X as likely
relationships 21%

Expanding my 44%
professional
knowledge base 25%

Cascading 38%
thought leadership
in my field 19%

While it is clear that financial advisors who have successfully gained
clients from LinkedIn have been more active on the site, can their
success be traced back to their actual goal for using the platform?
Advisors who have leveraged the site to cultivate client prospects are
three times more successful when it comes to gaining new clients versus
those who have not leveraged LinkedIn to cultivate client prospects.
“ I use [LinkedIn] to make ‘cold’
introductions ‘warm’.”
Wirehouse advisor

8

Company compliance policies impact certain uses
of LinkedIn

89%
While company compliance policies do not appear to deter overall
social media adoption among advisors, the policies do affect how
advisors can specifically leverage social networks for business. For the
most part, companies have restricted social media actions that may fall
OF ADVISORS SAY THEIR COMPANY HAS A within existing guidelines or regulations governing communications to
SOCIAL MEDIA POLICY. AMONG THESE, and suitability for individual investors. Because of these restrictions,

9 IN 10
fewer advisors are able to perform certain actions on LinkedIn such as
requesting or writing recommendations, posting to groups or pages, or
sending InMail.

KNOW THIS POLICY It also is probable that these restrictions result in missed
opportunities by limiting the ways that advisors can connect with
potential clients. Some of the key activities tied to advisor success, such
as requesting connections or referrals, often require use of InMail.
Similarly, many companies limit active participation in discussion groups,
which would otherwise provide advisors with valuable opportunities for
brand building or demonstration of expertise.

Nonetheless, most advisors are permitted to access LinkedIn at work
(79%). The majority are allowed to list their company on their LinkedIn
“ I see many professionals profile (90%) and accept or request connections on the site (83% and
81%, respectively).
beginning to realize the
opportunities that may be missed Restrictions vary by advisor type
if they do not use these platforms. Likely due to a greater overall sensitivity to the regulatory environment
I am becoming more familiar among the larger financial institutions, company compliance policies are
with what our policy allows or far more restrictive for wirehouse advisors, compared with both
does not allow so that I can broker-dealers and RIAs.
increase my use of social media
Even for more benign actions such as listing one’s company on a LinkedIn
platforms to increase exposure profile or requesting connections, advisors from wirehouse firms have
and client interest.” more restrictive policies. Interestingly, nearly half of wirehouse advisors
who have increased their business use of LinkedIn attribute this to a
Broker-Dealer decrease in company compliance policies or securities regulations.

Evolving social media policies will contribute to advisors’
future success
It is clear that advisors are factoring social media into their long-term
business strategies in a significant way as they turn the corner toward
mainstream adoption. As more financial advisors integrate social media
into their business practices and companies realize the marketing
potential of these platforms, it is expected that compliance policies will
evolve, particularly as they relate to the more business-oriented
platforms like LinkedIn.

Though many advisors are successfully leveraging LinkedIn for their
business needs already, there is ample room for opportunity. Advisors
would ideally like to leverage social networks – specifically, LinkedIn – for
more business purposes than they have been able to in the past. For
example, while half of advisors who use social networks for business
would ideally use LinkedIn to cascade thought leadership, just one-fifth
have been able to leverage LinkedIn for this purpose.

Together with the benefits of evolving policies, empowerment and
education will help advisors to optimally leverage LinkedIn and to
understand how best to work within the parameters of compliance.
Even for independent advisors who do not benefit from company
support, increased familiarity with social platforms and capabilities will
help lead advisors to the tools and features that are most valuable for
their business needs.

9

To learn more about how LinkedIn Methodology
Marketing Solutions can help you
This report is based on a February 2012 online survey of 463 total
reach financial advisors, visit
financial advisors in the United States, including 203 advisors on the FTI
marketing.linkedin.com.
Consulting Affluent Dynamics panel and 260 advisors on LinkedIn.
Across all qualified respondents, there were 139 financial advisors from
wirehouse firms, 209 from broker-dealers, and 115 registered
investment advisors.

Selection of qualified respondents was based on self-identification of job
About the Authors function, products/services sold or recommended, and compensation
structure, in line with commonly accepted definitions. Qualified
respondents also were required to have used at least one social network
for business in the past year.

Though not counted toward the total qualified respondents, those who
Emily Friedman were found to be qualified financial advisors but did not qualify based on
LinkedIn social media use still were used to determine overall usage proportions.

Emily Friedman is a researcher at LinkedIn,
where she leads primary studies for the
Marketing Solutions business. With a focus About LinkedIn
on audience and industry research, Emily Founded in 2003, LinkedIn connects the world’s professionals to make
drives insights that help marketers make
more informed decisions and create better them more productive and successful. With more than 150 million
strategies. Her experience includes extensive members worldwide, including executives from every Fortune 500
primary research, quantitative analysis and company, LinkedIn is the world’s largest professional network on the
media measurement for clients across a Internet. The company has a diversified business model with revenues
range of industries. coming from member subscriptions, marketing solutions and hiring
solutions. Headquartered in Silicon Valley, LinkedIn has offices across
the globe.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to
helping organizations protect and enhance enterprise value in an
Neil Benedict increasingly complex legal, regulatory and economic environment. FTI
FTI Consulting Consulting professionals work closely with clients to anticipate,
illuminate and overcome complex business challenges in areas such as
As managing director for FTI Consulting, Neil investigations, litigation, mergers and acquisitions, regulatory issues,
Benedict oversees the company’s research reputation management, strategic communications and restructuring.
capabilities for the financial services sector.
He has over 20 years of experience in senior The company generated $1.56 billion in revenues during fiscal year 2011.
marketing and general management
positions at companies such as Ameritrade,
AC Nielsen, Citibank and Unilever. Neil is the
founder of Affluent Dynamics, LLC, a leading
custom market research firm that was
acquired by FTI Consulting in 2007.

Copyright © 2012 LinkedIn Corporation. LinkedIn, the LinkedIn logo, and InMail are registered trademarks of LinkedIn Corporation in
the United States and/or other countries. All other brands and names are the property of their respective owners. All rights reserved.
07-LCS-WP-005 0412

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