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Social workers

Should advisers be setting aside traditional marketing tools and instead embracing social media? What can a presence on Twitter and Facebook bring to an advisory business? Two experts go head to head over social media

Ian McKenna

Social media are transforming the ways people communicate. It is hard to understate the impact they will have on the ways that 21st Century consumers take a wide range of decisions, including which financial products to buy. That said, the impact of social media on adviser businesses must be seen in the context of wider change.
Only when firms have prepared to meet the challenges of these changes should maximising the opportunity offered by social media become a priority. RDR means that many adviser firms will be forced to adopt business models that are vastly different to their current operations. To do so effectively, advisers need to have a clear
understanding of the proposition they will offer different types of customer. As adviser charging considerably reduces the scope to allow different customers to cross subsidise each other, it is essential for advisers to understand the profitability of each client.

The natural way for advisers to measure client profitability and carry out customer segmentation is by embedding a suitable client management
system at the heart of their business. Correctly implemented, this should enable advisers to automate many processes which if maintained
manually would incur significant costs. Under the new regime, these costs should be passed to the client.

The natural way for advisers to measure client profitability is by embedding a client management system at the heart of their business

Other forms of new media also mean that one of the traditional roles of the adviser, as gatekeeper to information, has become obsolete. Infomediaries such as Money Supermarket and others are now making an increasingly wide range of financial information and ever more planning tools available online, either free or at minimal cost. Adviser firms who can fully leverage their position of having access to the most accurate information about their clients should be able to continue to maintain an advantage over the infomediaries. This will mean deploying
powerful, dedicated client-facing online propositions to provide customer-specific information. While social media may be an excellent way of attracting and maintaining a dialogue with clients it will be the information-rich services that enable firms to show their true value. Social media alone cannot deliver this.

In summary, while it is important for adviser firms to develop a strategy for maximising the benefit of social media there are several other key decisions around technology that will be even more imperative for long-term prosperity of their businesses. If firms cannot adapt their commercial model to meet the challenges of RDR, they will soon cease to exist. Consequently, in the immediate future it may be appropriate to address the other points outlined above before addressing social media.

Martin Bamford
Managing director

Informed Choice

The main impetus behind us embracing social media was an ability to reach a wider autdience. We have always tried to keep up with new innovation and be early adoptors, which has meant trying as many things as we can. We started out just blogging on our website and then moved into podcasting in September 2007. It was still very new then and we were one of the first advisers to do it.

Initially, there was no great science behind the subjects that we chose for blogging or podcasting. We tended to look at other sectors and would see what had worked well for them. From there, it was a case of adapting it for retail financial services. Now we’ve been doing it for a while, we can tell what goes down well.

For us, social media served three main areas: Part of it was about attracting clients. We have seen a great number of new clients come
to us through social media over the years. It also served to provide a better service to existing clients. We email our newsletter every Monday
morning to all our clients, keeping them updated about the main news stories that affect them. Finally, it is part of raising our profile generally. It is another way of reaching a wider audience, including the media.

For some advisers it will still be a step too far. Some don’t have websites or email, so there is a huge catchup process

Now we have expanded our social media presence to include Twitter. I’m an avid tweeter. I now have 1,500 people following us on Twitter and they tend to use it to get a view on what is going on.

We rebuilt our website – – last autumn and it now integrates with all the other social media sites. There are about 225 links. That said, we are selective about the ones we use and are not active on all of them. The website is vitally important – it provides the core of the experience, so that really needs to be working before exploring other areas.

When we started doing social media, the main audience was younger. Groups such as MySpace were really only looking for the younger demographic. Now, the bulk of the users are 40-plus. This is very much our target market. They don’t trust traditional advertising or marketing, but they trust the opinions of their close network. Unless advisers embrace social media to some extent, they may miss out on that group.

Is is for everyone? We do it as one part of our marketing plan and it remains only one cog in the system. For some advisers it will still be a step too far. Some don’t have websites or email, so there is a huge catch-up process to go through before they embrace the opportunities afforded by social media. It is a question of not running before they can walk.


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Great that this subject is now being actively discussed – albeit three years too late.

    Social Media is suddenly the flavour of the month in the industry but its not exactly new. There was a huge amount of interest in it at the Social Media in Financial Services conference in January, showing that both IFAs and providers are really starting to embrace it now.

    But of course the two most influential online tools are going to be LinkedIn and YouTube. IFAs really need to learn how to use them as part of their marketing and communications if they are really going to benefit from the Social Web.

    Philip Calvert

  2. I agree with both points of view represented in this post. IFA firms need to first have a clear value and service proposition (i.e. their ‘house in order’ from an RDR perspective), before they even contemplate using social media to build their brand or attract new clients.

    Customer segmentation is important, as is knowing your target clients and how they want to engage with you. Social media should be viewed as an opportunity to generate interest from prospective clients and create a dialogue with existing clients.

    When used as part of a strategic marketing plan, social media can be a really powerful tool. However, unless you a) have a clear value and service proposition, b) a sustainable business model that will survive post RDR and c) a website that converts, you’ll be wasting your time and resources.

    Graham Jones, the noted Internet Psychologist, used an interesting analogy at the Social Media in Financial Services Conference: social media can be like inviting people to a party. When they get there they’ll have basic expectations about what the experience will be – an engaging host, a drink, music, maybe a few bar snacks. If you have a website that doesn’t clearly articulate what you do or ‘convert’, you’re inviting prospects to a party in a darkened room without a host, DJ, food, or interesting people to network with. The result: a lost opportunity or even brand damage.

    If you use social media, have a plan and use it as part of your overall marketing strategy. It does more harm than good to have a social media presence that isn’t well thought out and subsequently abandoned early.

    Customer experience should always be the foundation of any new marketing or business growth strategy.

    Abbie Tanner

  3. Using social networking sites is all well and good. I would be interested to hear though how Twitter for example can be used to market financial services in a compliant manner?

  4. @ William

    You don’t use Twitter or social networking sites to directly market financial services. If you do, compliance will always need to be involved – but that’s no different from any other marketing activities an IFA might do.

    You use Twitter and social media to listen to your market, to network, to add value, to engage, to learn, to collaborate, to comment, for customer service, to build community – and yes to occasionally highlight articles, events etc on your own website.


  5. A significant benefit of using social media for IFAs is its openess and transparency.

    Important factors for clients in selecting an advisor are those of trust and integrity. Advisors that openly comment, and importantly invite comment through social media channels are demonstrating that they are open about what they do and are happy to be held to account. This enables them to demonstrate an integrity and openess that resonates well with Joe Public.

    I agree that it is isn’t the only marketing channel to use but one that can deliver great value for the advisory sector if used properly.


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