“I don’t use social media because Compliance won’t let me.” Is that why you’re not on LinkedIn or Twitter? If so, you may want to check and see if that’s still true, advises social media thought leader Spencer X Smith.
In the last few years, many broker-dealers and RIAs have eased their restrictions on use of social media platforms, set new standards and issued guides for advisors on user-generated content on what’s allowed, Smith told attendees at an April 16 workshop session at the 2018 NAPA 401(k) Summit in Nashville.
Smith broke down three areas in particular where many firms now allow social media activity:
Liking and sharing. While many firms still prohibit liking and sharing – deeming both to be kinds of prohibited endorsement – many others have done away with that and now allow it. For advisors at firms where sharing and liking are still prohibited, Smith advised: “Instead, post yourself about upcoming and past events, and say something nice, or even something innocuous.”
Link it up. Smith encouraged advisors to link to area businesses and non-profit organizations, highlighting upcoming community events, and to look for ways prospects are recognized by the local business community. Examples include coverage in local business magazines and websites of awards and other forms of recognition.
Got questions? Got answers? Smith noted that many firms now allow advisors to post their own questions on social media and to answer questions posted by others as well. Asking questions can create the kinds of interaction with clients and prospects you want, and answering questions can be a valuable reputation-builder.
[caption id="attachment_81086" align="alignright" width="300"] Social media thought leader Spencer X Smith addresses the crowd at NAPA 401k SUMMIT.[/caption]
Return on Investment
Smith shared his view of an issue that has been an obstacle to greater – even any – involvement in social media: justifying the costs and the bottom-line impact. Drawing upon a book he co-authored about the ROI of social media, he began with the conventional calculation of return on investment: gains minus costs, divided by costs.
So what are the potential gains that social media can lead to? Smith listed some important ones:
- New revenue
- New clients
- Brand recognition
- Market share
- Client loyalty
As for the potential costs associated with social media, he listed:
- Soft-dollar costs like time
- Hard-dollar costs like fees and other payments
- Opportunity cost
- Risk assumed
No matter how the ROI calculation works out, Smith said it’s important to not lose sight of the goal: to be top of mind for the right people at the right time.