Social media has become more than a popular buzzword over the past few years. Still, many businesses sign up for an account, spend a few days or weeks on it, and walk away with little to show for their efforts. The problem is that social media isn’t meant to be a platform to shout messages to the masses, but rather a communication tool to effectively make social connections. These connections can be tremendously valuable for those that know how to build and nurture them.

Let's take a look at three benefits that financial advisors can realize from social media and how to integrate it into their practice. (For more, see: Social Media 'Don'ts' for Financial Advisors.)

Find Market Insights

Social media provides a great tool for market insights, since it enables financial advisors to follow a variety of analysts, economists, and other financial professionals. For example, financial advisors can follow famous economists like Robert Shiller on Twitter to receive his real-time thoughts and updates on the economy. These insights enable advisors to track information on their own terms rather than waiting to watch what a TV network shows.

In addition, financial advisors can follow specific topics via hashtags—a label Twitter and other social media sites use to make it easier to find messages around a specific topic—in order to keep tabs on the latest commentary. Twitter automatically filters out the most relevant users discussing a subject, but lets folks dive deeper if they desire. For example, the hashtag #financialservices might help advisors keep track of the latest developments in their industry with links to articles like “20 Bet Websites of Financial Advisors.”

The best way to find these market insights is to start following popular industry personalities and then taking note of who they follow or retweet. Twitter’s TweetDeck, HootSuite, and other tools can also make it easy to track these conversations over time without having to search through long activity feeds or private messages. Twitter users can also curate lists of popular followers in order to track key opinion leaders in a single place. (For related reading, see: Advisors, These Mistakes Could Cost You Clients.)

Reach Prospective Clients

Financial advisors should leverage social media to engage followers rather than simply listening to conversations. For example, an advisor that maintains a blog might decide to share her post on Facebook to reach a wider audience interested in her content. These followers might not be ready for a financial advisor at the moment that they follow you, but engaging them over time increases the likelihood they’ll remember you in the future.

It’s important to remember to use social media in a conversational way rather than simply pushing out these kinds of updates. For example, consider reposting content from others and mentioning them in a tweet on Twitter and responding to users who retweet or share your content with others. Social media is meant to be just that—social. By engaging others, you’ll set yourself apart from countless others that simply push content out to the world.

Financial advisors may also want to consider advertising in ways that don’t violate securities regulations. For example, it may not be appropriate to post any specific financial advice online, but an advisor might decide to share a blog post that generically covers common tax mistakes. The advisor can even promote his or her blog post on Facebook or Twitter and target specific demographics in order to generate highly targeted traffic for the website. (For more, see: How Advisors Can Use Pinterest, Instagram to Grow.)

Nurture Existing Client Relationships

Financial advisors often have a tough time dealing with existing clients when the market takes an unexpected turn. On the flip side, clients that don’t hear from their financial advisor regularly may think that they’re being ignored. Many financial advisors don’t help the situation by meeting with clients only a handful of times per year and perhaps sending the occasional e-mail update that contains generic information.

The good news is that social media can help make connecting with these clients easy and convenient. Since social media is a one-to-many broadcasting system, financial advisors can quickly convey thoughts on the overall market to all of their clients rather than scheduling time to meet with them individually. This can help save a lot of time, especially when a market downturn may prompt a number of clients to worry about their portfolios.

Some financial advisors like to post generic market updates that contain important information about the economy and financial markets. These kinds of updates can help reassure clients following an advisor's feed that the advisor is staying abreast of the latest trends. Social media profiles may also be built with easy ways for clients to reach out and call with any concerns, thereby taking specific conversations off of a public forum and into a private communication.

The Bottom Line

Social media can be a tremendously valuable tool for financial advisors who know how to use it to their benefit. While many businesses try out social media and give up, those that act with a specific purpose can leverage it for market insights, client prospecting, and nurturing existing client relationships. These are all high-return activities that can help set an advisor apart from the competition and drive a consistent stream of inbound leads. (For related reading, see: Advisor Tips for Marketing to Niche Clients.)

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