Social media adoption has been slow within the financial services industry. But as the SEC and FINRA offer more guidance, these technologies have started to pick up steam and even become a standardized part of many large companies in the space.

LinkedIn has become the most popular social media network used by financial advisors, with more than 73% of U.S. advisors maintaining a profile. By allowing users to connect with existing clients, the network provides a great way to seek referrals from second and third level connections. The recent acquisition by Microsoft could also open the door to more widespread adoption among professionals and potentially see the addition of new features to the underlying technology.

Let's take a look at some best practices for financial advisors using LinkedIn to grow their businesses. (For related reading, see: LinkedIn Scripts a Turnaround.)

Facilitating Introductions

Facebook Inc. may be helpful for tracking friends and family, but LinkedIn users are all about business. In fact, most people use the social media network as a way to connect with professionals and find job opportunities.

The first step in leveraging LinkedIn to drive business leads is filtering by commonality. Using the Advanced Search feature, financial advisors can identify people based on their location and school (alumni) as a starting point. A more detailed search may be a query based on interests to find common ground to build rapport. For example, an advisor interested in jogging may be able to find nearby alumni that are also interested in running.

Next, advisors may want to consider filtering these leads by 1st or 2nd degree connections. If there are connections, it may be helpful to contact those individuals to see if it’s possible to get a warm introduction. These kinds of introductions can be extremely helpful in building immediate rapport and are generally a lot more successful than contacting cold leads. After all, nobody likes to be solicited out-of-the-blue by sales people. (For more, see: Top Social Media Tips for Financial Advisors.)

Messaging Best Practices

Financial advisors who are new to LinkedIn may be tempted to send messages using the built-in messaging tools. Unfortunately, these types of communications have very low response rates since many users are inundated with communications and connection requests every day.

The leads collected via Advanced Search are best contacted via phone. Often times, this means that an advisor must request a connection and then view the profile to get the information. A well-placed phone call will convert much more highly and give the advisor an opportunity to build a more personal rapport. It’s a good idea to use information from the profile on these calls in order to find common ground and build a relationship.

The best leads are those with close connections. In these cases, advisors can reach out to their connections via phone or e-mail (again, messaging is rarely a good idea) and ask for an introduction. Advisors may also want to consider adding their existing clients and then requesting a few introductions in person. While the process may be awkward at first, it can result in a significant number of warm leads that convert to clients. (For more see: How Advisors Can Carve Out a Social Media Niche.)

The Bottom Line

LinkedIn has become the most popular social network used by financial advisors looking to identify potential clients. Those that know how to best leverage that service and find commonalities — including interests and schools they attended — can use that information to build a better relationship with leads. The key is asking for these kinds of introductions and picking up the phone rather than relying on the service’s internal messaging system. (For related reading, see: Social Media 'Don'ts' for Financial Advisors.)

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