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Nick Bamford, chief executive of Informed Choice, says IFAs need to recognise that social networks are becoming an increasingly valuable source of communication and business

Recent research by Opinium Research’s Independent Voice survey showed that 63 per cent of IFAs felt that social networking is not always an appropriate means of client communication.

Thirty-two per cent of IFAs believe that offering advice on such sites is risky. Indeed, the research stated that some IFA firms have banned the use of social networking by their employees.

The FSA recently focused its attention on social media. Last month, it published an update on the rules for financial promotions following a review of the use of new media but this should be seen not as a warning that social media should not be used but as a reminder that the rules on promotions still apply.

The use of social networking is growing rapidly and it will not be long before the most common method of finding a trusted adviser will be through the use of such sites as Linkedin and Twitter. Facebook already demonstrates the way that what starts out as a new fad quickly becomes mainstream. We regularly analyse the source of new enquiries to this firm and the statistics are quite telling.

In 2008, 3 per cent of our new clients came to us because they had found out about our services via an internet search such as Google. In 2009, that number was 19 per cent.

A review of new client enquiries for the first quarter of this year shows that as much as 38 per cent of our new client enquiries are finding us by an internet search.

The search engine optimisation for finding our website is enhanced by our use of social media. Rather than a long-winded article explaining the detail take a look at the cartoon strip here.

Social networking is one of the key ways in which the IFA of the future will promote their services. It works, so ignore it at your peril.


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