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Survey Takes a Jab at Social Media’s Limitations

March 26, 2014

Most investors use social media — and nearly half of those who don’t would do so if they could use it to connect with a financial advisor, writes ThinkAdvisor, citing a report by Finect, a social-media channel for advisors and their clients.

The point: There’s a disconnect between consumer and advisor uptake of social media, one it seems consumers would like to see bridged — and that, make no mistake, Finect wants to publicize. This gap shows up in another data point from the survey. When social-media users were asked why they interact with advisors through social media, 22% said their advisor doesn’t use it, and 27% said they couldn’t find their advisor in social-media channels.

“Investors are sending a loud and clear message to the financial industry: We’re open to talking on social media. We’re likely to listen and engage — if we can find you,” a Finect spokesman tells ThinkAdvisor.

Still, a bit more than half of social-media-using investors feel it’s either safer or more appropriate to interact with advisors using traditional means like e-mail and telephones.

Finect — which runs a social-media engine for connecting advisors and clients in a closed (and, it says, compliant) circuit — comes up with a finding that seems to refute the advice most social-media consultants give advisors.

Consensus says advisors are less likely to rile regulators if they stick to social-media posts about non-financial matters like bake sales and little-league scores, stuff that’s said to have value because it humanizes advisors in the eyes of their clients. But Finect says its survey indicates a “strong preference” for “information on investing and personal finance rather than lighter communication that focuses on an advisor’s travel or lifestyle choices.”

These views aren’t mutually exclusive, but the second claim seems to support Finect’s business model — and make sense to some outsiders. “Advisors have a huge opportunity to reach new investors this way,” Leslie Marshall, director of social media at Morningstar, tells ThinkAdvisor. Advisors just need to “think of new ways to connect with them,” she adds.

In broad terms, Finect’s closed-circuit approach to social media is similar to that of TrustedFamily, a Brussels-based website for ultra-rich families. This service looks and operates a lot like Facebook but it excludes all but approved and registered family members.

By Thomas Coyle
  • To read the ThinkAdvisor article cited in this story, click here.