Financial Advisors Broadly View Social Media as a Disruptive, But Positive Force in All Aspects of Their Business, According to New Putnam Investments Social Advisor Study

Study Reveals Social Media Use Nearly Universal among Advisors, Although Skill Level Varies Widely

Nine of Ten Advisors Report that Social Media Has Changed the Nature of their Client Relationships

Financial Advisors Broadly View Social Media as a Disruptive, But Positive Force in All Aspects of Their Business, According to New Putnam Investments Social Advisor Study

BOSTON, April 3, 2018 – In the fifth edition of the Putnam Investments Social Advisor Study, released today, financial advisors almost universally report that the use of social media has changed how they communicate with clients, conduct business, approach prospects and convert leads, all while sharply reducing the amount of face-to-face time with clients and prospects previously required to manage their business.

Putnam’s survey of 1,014 U.S. financial advisors found that 86% of those using social media for business reported it helped them gain clients, up from 80% in 2016, and the vast majority of those who gained (88%) report that their use of social media has changed the nature of their client relationships a “great deal” in a number of ways:

  • Two-thirds (67%) of advisors find that it is easier to share information with clients
  • Nearly six in ten (59%) report having more frequent communication with clients overall, although 38% say they connect less frequently by phone or in person
  • More than half (54%) of advisors say they have a better professional relationship with their clients, while 47% report a better personal relationship with their clients
  • Half (50%) report decision making is faster and easier
“Advisors today are increasingly using social media as a tool not only to communicate with their clients and prospects, but also to deepen and evolve their ongoing relationships with clients,” said Mark McKenna, Head of Global Marketing, Putnam Investments. “These professionals are also finding that leveraging both the business and personal sides of social media enables them to more easily connect with current clients and attract and develop new business.”

McKenna emphasized that the benchmark for successful use of social media as a business tool has clearly gone up in recent years. “It is imperative for advisors to employ a highly active, evolving strategy when it comes to utilizing social media in various aspects of their business. As a firm that is deeply committed to helping advisors grow their practices through dynamic, yet effective social media engagement, Putnam believes that there is a tremendous, ongoing opportunity for financial intermediaries to build and strengthen long-term relationships with clients through this critically important communications channel.”

Social Media Use Driving Business

According to the study, social media use is nearly universal among financial advisors, with fewer than three percent of advisors reporting no business or personal use of social media. Those advisors not using social media, on average, are 60 years old, have 24 years of industry experience and have only $69 million in assets under management. By comparison, advisors who use social media for their business have on average $89 million in assets under management and advisors who use social media only for personal reasons have on average $85 million in assets under management, suggesting that even a casual social media presence may result in additional business.

Advisors using social media say they are spending somewhat less time on simply connecting and posting on the various platforms, but remain highly positive on a focused use of social media to attract and develop new business. The vast majority of those using social media for business (86%) report gaining business from social media activity, up from 80% in 2016 and 49% in 2013, the first year the study was conducted. Six in ten (60%) advisors who have gained say social media use has improved their efficiency a great deal compared with traditional networking, up from 56% in 2016, and more than eight in ten (83%) say that social media use has helped shorten the time required to convert a prospect into a client.

Social Platforms of Choice

As social media use matures, advisors are using multiple social media platforms for different functions. LinkedIn is overwhelmingly the network of choice of advisors for their business, with 73% reporting they use LinkedIn, compared with 56% who use Facebook and 46% who report using Twitter for business. Use of other platforms for business is also growing: 42% of advisors indicate they use Yelp, 39% use YouTube and 34% use Instagram for business. Although LinkedIn continues to be the leading business site, advisors report they use Facebook with the greatest frequency for business — an average of 22 times per month, versus only 16 for LinkedIn.

“Over the past five years, we have found that LinkedIn’s share of net business use has flattened among advisors while the use of every other network for business has grown,” added McKenna. “LinkedIn remains a critical tool, as its user demographics and rich, indexed data are unique compared with the other leading social media platforms. LinkedIn provides a concentrated network of college educated and relatively affluent users, making it the best place to qualify leads, obtain referrals and begin the process of converting prospects. However, advisors are conducting day-to-day social media business on other platforms.”

Advisor “Social” Skills Vary Greatly

Although social media use is widespread and 86% of advisors 1 say that social media has helped them gain clients, advisors report a range of social media skill levels:

  • Nearly half (46%) of advisors claim to be social media “experts”
  • 41% say they “just get by”
  • 5% are just getting started
  • 2% would like to get started but need helpAdditional Findings
The study yielded other notable findings:
  • Advisors with $100 million or more in assets under management are more likely to have gained clients from social media use
  • One-third of advisors 1 (34%) say social media plays a very significant role in their marketing efforts, up from 29% in 2016
  • Nearly two-thirds (65%) of women advisors (and 57% of men) say that using social media has improved their efficiency a “great deal”
  • Advisors with three to 10 years tenure in the industry are the most likely to gain assets with social media use
Methodology

The research, conducted online in late 2017 in conjunction with NMG Consulting, included participation by 1,014 financial advisors across the United States who have advised retail clients for more than two years. The sample includes a mix of newer and more established advisors, who work across a range of intermediary channels, including independent and regional broker-dealers, nationwide planning firms, wirehouses, insurance firms and RIAs. Advisors were queried about AUM and assets gained via social marketing in ranges; median and average samples are based on range midpoints. The results of the survey can be found at AdvisorsAREsocial.com.

About Putnam Investments

Founded in 1937, Putnam Investments is a global money management firm with 80 years of investment experience. At the end of February 2018, Putnam had $173 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Tokyo, Singapore and Sydney. For more information, visit putnam.com.

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Jon Goldstein
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Director of Corporate Communications
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Jennifer Stutto
Corporate Communications Associate
617-760-8582
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