Rise of Social Media

The era of social media is upon the financial services industry. With social media surging in popularity over the last year, it’s estimated that more than 43% of those who use the Internet now use social networking sites, such as Facebook, MySpace and LinkedIn (Source: Consumer Internet Barometer). With so many clients taking advantage of the Internet to communicate, financial services professionals are increasingly using social networking tools to keep in touch with current clients and reach out to new ones.

A recent Rydex AdvisorBenchmarking survey found that advisors are most interested in learning how to harness social networking platforms to secure new clients (46%), enhance communication with current clients (35%) and advertise or promote their firms (30%).

 

 

While interest in using social networking tools as a way to better communicate with clients continues to grow, it’s more important than ever to ensure that your firm has an adequate method in place for capturing and supervising social media communications.

 

Financial Professionals are Embracing Social Networking

Many of the most successful financial professionals are relentless networkers. As with the invention of websites, email and instant messaging, these professionals are often the first to use the latest technologies to better engage with their clients and prospects. Few others rival financial services professionals in their ability to leverage new communication tools to enhance their clients’ experience. However, in the post-Madoff era, new communication tools pose more risk than ever before to financial professionals and their busy compliance departments.

The dilemma is that financial professionals want to be on social networks, but they need a way to minimize the risk. Considering that more than half of advisors agree that social networking is here to stay, social media is likely to have a lasting impact on the financial services industry.