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Financial Planning Technology and Social Media: Don’t Get Left Behind

By Martin Bamford, CFP

 There is no disputing that the world has changed significantly over the past decade. Social Media has made major in-roads into our lives, changing the way in which we communicate with our friends, family and colleagues, even with complete strangers.

This has major implications for financial planners. Where as previously a client or professional connection might refer you by passing over a business card or handing across a printed newsletter, referrals today are far more likely to happen as a result of a tweet or LinkedIn introduction.

Financial planners without a substantial online presence risk losing out to their competitors who have embraced everything social media has to offer. If it is not easy to refer you by reference to your Twitter account name, I will simply move on to the next person who is easy to refer.

Building Credibility

The visibility and credibility that can be created through regular blogging and tweeting provides financial planners with exceptional opportunities. This is not simply about attracting new clients, although social media is very effective for this purpose. Having an active social media presence is also about reinforcing strong relationships with existing clients.

In the UK, financial planners are reasonably polarised between those that have embraced social media and those that have not, for whatever reason. Some of the largest firms in theUKhave actively discouraged their members from using Twitter, out of fear of regulatory risks or risk to corporate reputations. Others perpetuate the myth that typical clients do not use social media, as a way of justifying their absence from this space.

Poor Excuses for Not Using Social Media

Both of these excuses are fairly poor. The regulations that apply to social media are no different than those that apply to any other communications channel. You can stay on the right side of the regulator by simply refraining from giving advice or pushing a financial promotion. As for the demographics of social media, nearly a third of our new clients last year came from this source. If our typical target clients are not supposed to be using Twitter, nobody has bothered telling them!

Whilst using social media and having an active presence across various networks can be time consuming, it is becoming easier to do this without it interfering with important client facing and business management activities. The proliferation of mobile apps means I update Twitter from my iPhone or iPad, for example, as well as using an application on my desktop computer while I sit at my desk.

Social Media Compliments Traditional Communication

It’s important to remember that social media compliments more traditional communication and interaction, rather than replacing it. We hosted a seminar yesterday afternoon for our local professional connections. As well as networking in the flesh, we were exchanging tweets during the various presentations. This approach allows those who could not attend to participate. Social media adds a new dimension to seminars, conferences and other meetings.

Whilst the leading providers of social media tools will undoubtedly change over time, the use of social media is only likely to grow further. As smart phones keep getting smarter, financial planners will need to participate in these technological and social media advances, or risk being consigned to the evolutionary dustbin.

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