As soon as he learned a client was headed to Disneyland, financial planner Wayne Rothe bought him and his wife a book on navigating the California park.
Greg Pietras, an advisor in Rockwood, Ont., also moved quickly—in his case, to counsel a client who’d left a job where he had stock and registered pension plans.
Nothing unusual about the advisors’ responses, except the clients never told them their news—at least not face-to-face.
Rothe heard about the Disneyland trip through a Facebook post; Pietras noticed his client’s job status change on LinkedIn.
They’re among a new breed of financial professionals who use social media to find out information about clients, not just to market their businesses or shape their brands.
Consider the three main networks:
- Facebook, a social networking website, lets its billion users create profiles, upload photos and video, and exchange messages;
- LinkedIn’s 200 million users see it as a Facebook for business, facilitating professional networking; and
- Twitter, a social networking and microblogging service, helps 500 million users worldwide send and read 140-character comments about any subject.
Friending clients on Facebook, connecting to them on LinkedIn, or following their Twitter feeds all help you learn more about their personal and professional lives.
By taking smart action on that information, advisors can leverage social media to “develop deeper relationships with clients,” says Rothe, who works with Manulife Securities Investment Services in Spruce Grove, Alta.
Opportunities to connect
People openly broadcast details about their likes, dislikes, work, family, relationships, goals and plans on these sites.
While it’s important to use that knowledge appropriately (see “An invasion of privacy?” below), the information gleaned from social media is, by nature, public.
An invasion of privacy?
Social media is hardly cybersnooping, but take care when using the information obtained. Advisors who follow clients online share three tips:
Don’t cross the line. While LinkedIn is a business social network, Facebook is more personal. Wayne Rothe has connected to several clients on Facebook, but waits for them to send the friend request. “Our relationship is professional, so I let them make the initial contact. If they do, I accept.”
Relationships come before business. If you hear on Facebook a client’s child has just graduated from university, send a card or offer help with a job search before suggesting RRSP strategies now that tuition is done. “You don’t want to be a slimy salesperson,” says Brittney Castro.
Remember the personal touch. Greg Pietras once learned via a client’s LinkedIn page that he and his wife were separating. He contacted the couple directly to ask if he could do anything to help. When topics are touchy, be just as sensitive in your mode of response. Even if a client has broadcast news to their world, “some things you have to do face-to-face or by phone,” says Pietras.
“It’s like people are on a mountaintop shouting to the world,” says Rothe.
“The fact that you can hear them doesn’t mean you’re stalking them. People have voluntarily provided information, so they’ve given permission for you to know about it.”
Still, it’s a good idea to give clients a heads-up before you add them to your network. Pietras, of IPC Securities, has put social media on his client meeting agendas. “This way you can broach the subject as to whether they use it for business or personal purposes,” he says.
“Open the discussion as to whether this is a way they would like to communicate with you.”
What if a client’s wary?
“If a client ever did object, I’d just apologize and move on,” says Jude Boudreaux, founder of Upperline Financial Planning in New Orleans, La.
“Explain that you like to connect whenever possible because you’re active in social media, but if they’re not amenable to a request you certainly understand.” Either way, clients have to approve your Facebook or LinkedIn requests before you’re able to view their updates (assuming they have the highest privacy settings).
Twitter is typically more public—you can follow anyone, and vice versa.
And remember, before interacting with clients on any form of social media, clean up your profiles (see “Keep your profile professional,” right).
Once you’ve connected, social media presents a wealth of opportunities.
Boudreaux says if he hears good news about a client via Facebook or LinkedIn—a work achievement, a big trip, a child who got engaged—he’ll reach out to recognize the milestone.
“It shows you’re paying attention,” he says. “I’m not just the guy who manages their money, I also appreciate being part of their lives.”
Often, you can take information from the social media grapevine and tie it to a meaningful gesture. For instance, Rothe saw a Facebook post in which a good client raved about a Japanese restaurant.
The next time he invited the client to lunch, he made a reservation there: “His reaction was exceedingly positive.”
Boudreaux learned on Facebook that a client’s godson was accepted into the U.S. Air Force—a tidbit he wouldn’t necessarily have known otherwise.
Via the client, he sent the young man a book about the history of the Air Force, and attached a note saying how proud the client must be of his godson. Such acknowledgements make an advisor stand out, he says.
The endless benefits
You can also use social media to help clients succeed.
For instance, Brittney Castro, a financial planner and founder of Financially Wise Women in Los Angeles, Calif., has a client who runs a website design business.
When the client announced a product launch on Twitter, Castro re-tweeted the news to her own followers, which currently number more than 2,200.
“I’m seen as a connector,” she says.
And then there’s speed. Pietras learned about his client’s job change the week it happened—in fact, the LinkedIn update came before the client started the new job.
He was able to reach out to congratulate the client, and advise on managing or transferring the share purchases and options, as well as the pension plan.
“As a result of using Linked-In and being aware of the situation,” says Pietras, “we ended up providing sound planning advice.”
Boudreaux adds a scan of LinkedIn and Facebook before a client or meeting can augment what you already know. “It gives you a pulse of what’s going on,” he says.
Despite evidence in its favour, many advisors still grapple with how to best capitalize on social media.
A 2012 Environics survey finds only 26% of Canadian advisors use it in some capacity in their business, and only one-third agreed social media tools are useful.
Demographic trends, however, suggest those numbers will rise.
Castro, whose target market is women in their mid-20s to early 40s, says, “You have to go to where your clients are.”
For her client base, that place is the social media community. And monitoring doesn’t have to be time-consuming.
Boudreaux does it in small bursts, maybe five-to-10 minutes throughout a day. Pietras says 20 minutes a few times a week is enough to stay connected, though you get messages or updates from people in your network automatically.
“Short of a great meeting, I can’t think of any better way to learn about clients,” says Boudreaux.
“If someone said 20 years ago there were places to go to find out all about clients and their families, advisors would have paid a substantial amount of money for that information.
“Here we are getting it for free. We have to pay attention to that.”
Stuart Foxman is a Toronto-based financial writer.