Financial advisers are failing to make full or successful use of social media in their businesses since they are using the wrong approach.
“The social media revolution to date has really been in advertising as it’s been a new way to advertise and promote product and commoditised services,” The Social Adviser’s chief executive, Baz Gardner, told InvestorDaily.
“But for advisers, it’s a completely different paradigm [because] it’s not about making impressions, promotions or marketing; it’s about relationship management, trust, creating community with clients, breaking down barriers for referrals and creating word of mouth for your services.
“That’s a completely different process.”
Advisers are also using negative perceptions of social media to judge platforms such as Twitter, despite the opportunity for the industry to present innovation and service in a new way and therefore grow the market, Gardner said.
“The reason that most businesses are failing on social media adoption, strategy and implementation is that it requires changing the perceptions, philosophy and understanding of people,” he said.
“We have to change advisers’ mindsets to [get them to realise] this is what you’ve always been doing – building on relationships, getting referrals, creating trust and relying on word of mouth. It’s just that you can do it so much better -paying for social media gurus to blast messages does not work.”
When it comes to adopting and benefitting from social media, the financial services industry is still in its infancy, Gardner said.
“You’ve got the banks doing it on the retail side but no one has really got any idea about how to go forward on the relationship aspects with financial advisers and personal bankers because they don’t know how to change and empower their people to use it,” he said.
“But advisers are the ones who will drive real change.”
In Gardner’s experience it is much easier to encourage older advisers to make the mind shift and implement social media within their business strategies.
“At first, they are far more reluctant, but as soon as you get them to understand that it’s what they’ve always done and then show them that they don’t need technical skills, they get it [immediately] and achieve better results,” he said.
“The younger advisers have less hesitation but they think they know what social media is all about.”
The Social Adviser will launch its inaugural social advice summit, AdviserEdge, in February 2013.
