The overwhelming majority of advice businesses don’t find paid social media advertising effective and prefer to rely on promotion generated by their own employees according to research from BT.
A survey conducted by the financial services firm discovered only 11 per cent of advice business find paid social media advertising effective.
However, 61 per cent of advisers perceive the most effective social media promotion is generated by their own employees.
BT head of platforms distribution Christopher Mather tells Professional Planner he would like to see more paid advertising activity by advisers on social media to draw further conclusions on whether they get a return on investment.
“It doesn’t take much to dip your toe in the water, and gauge whether it’s worthwhile to increase your ad spend and/or dedicated resources to ensure frequency of communication through the channel.”
Half of advisers who participated in the survey received no referrals from social media in the past 12 months while 37 per cent obtained up to five referrals.
Facebook (78 per cent) and LinkedIn (75 per cent) are the most popular social media sites while Twitter is used by only 6 per cent of advice businesses.
Power of third-party promotion
While the BT research found that organic posts from individual employees are more effective, communications specialists PritchittBland Communications noted the best endorsements always come from a third party.
“Having other people complement or congratulate you is much stronger than saying it yourself,” PritchittBland Communications director Claudia Pritchitt said. “It’s the way trust is built and reputations are made and it is simply more persuasive.”
Pritchitt said LinkedIn is cluttered with boasting and self-promotion which is why third-party posts can be more powerful.
“Messages and information should be developed that are of interest to the recipient. All too often however, self-promotion and ego-boosting posts on LinkedIn are getting in the way of useful information and the opportunity to truly connect.”
Double-edged sword
The financial space on social media is likely to have become quieter with ASIC’s crack down on finfluencers, but advisers have to be careful to avoid the same risks that have drawn the ire of the regulator.
ASIC told Professional Planner in March finfluencers breaking financial services law could face hefty fines and jail time.
CoreData’s Simon Hoyle said social media is a “double-edged sword”.
“It is an effective and cheap way to reach a significant number of clients (and potential clients), but there’s a fine line between that and wandering into a potential regulatory minefield.”
Hoyle said social media has a legitimate purpose for adviser communication and marketing but it’s easy to unwittingly stray into product advice.
“The moment you enter the realm of making any sort of recommendation that someone invest in (or sell) a financial product or class of product, then you’re straying into dangerous territory.”
