The Socially Savvy Advisor + Website: Compliant Social Media for the Financial Industry

Chapter 2What Are Social Media's Implications for the Financial Industry?

At the end of Chapter 1, I alluded to examples of how different industries in the United States responded to changes in behavior by their customers—new safety features in automobiles, less sugar and salt in food, and so on. It also happens that many American industries also are au courant with developments in social media as well.

Whether it's fashion or food, they not only have embraced social media, they've incorporated it into their businesses or built online communities around niche markets. Think of Yelp or Hotels.com for locally rated restaurants or overnight stays. Amazon.com has refashioned retail, not only by making it easier for consumers to buy what they want, but also by tracking customer interests and using that data to suggest other products their clients might enjoy. Even in our personal lives, places like Match.com have, for nearly a decade, transformed the way consumers can find their life partner.

Sitting Out the Game?

And yet a good portion of the financial industry remains skeptical about this revolution. To be sure, there is a healthy and growing presence of financial advisors on professional networking site LinkedIn, yet participation in other key social media channels is still pretty thin. A 2013 survey by InvestmentNews showed that only one out of four advisors used Facebook, and participation in other channels was markedly lower.¹

Industry experts say many firms are just tiptoeing ...