As part of Putnam's latest Social Advisor Survey, we asked financial advisors if they are using two of the most newsworthy social networks: Reddit and TikTok. Surprisingly, 31% of financial advisors using social media for business are using Reddit, and 21% are using TikTok.
The average age of an advisor using Reddit for business was 38, and they told us they gained an average of $8.3M in client assets from using social media. This is significantly higher than the overall advisor average of $5.8M.
Those using TikTok for business are on average 39 years old, and report average assets gained attributable to their use of social media at $6.9M.
Advisors who use Reddit are far more successful at turning a prospect to a client, at 73% versus an advisor average of 56%, according to the survey.
TikTokTikTok is a short-form video platform with 698 million active users worldwide, an amount that tripled over the past two years. The largest age range of U.S. TikTok users is ages 10 through 19, however 50% of users are over the age of 30, with 20% aged above 40.
In a January survey by LendingTree's MagnifyMoney unit, 41% of Gen Zers -- those born roughly beginning in 1997 up until a few years ago -- reported turning to TikTok for investment information, versus 15% of millennials, often categorized as those born between 1981 and 1996.
"We gained an early advantage by using TikTok ads. TikTok is emerging as one of the best social media networks with a localization advantage from engaging with local creators and the ability to use our own branded channels." — Financial planning company advisor, age 36, 15 years' tenure, $175M AUM
"We started using TikTok because we are trying to reach a younger demographic." — Bank advisor, age 41, 12 years' tenure, $150M AUM
Consistent with other survey findings, advisors are using TikTok as a messaging platform, rather than casting themselves as content creators. TikTok users in the U.S. are estimated to be active on the app nearly 30 minutes per day, according to Comscore, making them easily reachable on the platform.
The average age of a Reddit user is 25. In the United States, there are over 222 million active Reddit users, and 14% of adults age 30-49 use Reddit. In 2020, 2 billion comments were shared on Reddit and 49 billion "upvotes", the equivalent of a like. Users have created 2.8 million discussion threads.
The platform has been embraced by a younger generation of investors, born of the pandemic with an activist, iconoclastic approach. Discussions on Reddit can sometimes lead to large-scale mass investing with relatively small positions, pushing up the prices of certain "stonks" (stocks) and cryptocurrencies.
"Had to follow market-moving conversations tht only occur on Reddit." — Bank advisor, age 50, 20 years' tenure, $80M AUM
"I have numerous clients who use Reddit who invest in crypto and they ask for my advice, so I've started using it." — Bank advisor, age 36, 8 years' tenure, $150M AUMOf advisors using Reddit, 88% say they read Reddit to get useful information, and 68% say they actively participate in Reddit discussions.
Getting started with Reddit and TikTok
- Create personal accounts on both platforms. Stay compliant by restricting your presence and activity to a personal, rather than business, presence.
- Explore content. Add Reddit and TikTok to the social media channels you check regularly. On Reddit, start reading r/WallStreetBets, and on TikTok #stocktock or #financetock.
- Determine your next steps. If Reddit and TikTok fit into your practice, determine how you will incorporate these platforms into your marketing and prospecting strategies. You could consider a branded account, paid promotion, or client/prospect communication.
Learn more about Putnam's social media business building offerings for advisors.
Putnam Retail Management.