Advisors' attitudes toward social media are changing for the better, but few are maximizing its business-growing potential.
Though two-thirds of advisors today rank social media's overall value to their business as "high" or "medium," a 36 percent increase from 2010, only a fraction of that are using it effectively, according to American Century's fifth annual Financial Professionals Social Media Adoption Study.
"Many are still struggling with the best way to use it," said Jamie Needham, digital marketing strategist for American Century. "If leveraged correctly, social media has proven to produce tangible business results, yet only 7 percent of advisors surveyed chose business building and promotion as their top use of social media."
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Instead, the three top uses were reading expert commentary, researching people and monitoring industry and market news.
In conducting its online survey, American Century used a 10-point scale, with "high" being a value of eight, nine or 10 and "medium" being four, five, six or seven.
The poll of 309 financial professionals who are employed as financial advisors, brokers or RIAs was conducted during the first quarter and assessed their attitudes toward LinkedIn, Facebook, Twitter and YouTube.
"Only about 22 percent of the people we surveyed in 2010 felt it was a fad with little value for business," Needham said. "But now, that number is even smaller — down to 13 percent — which again speaks to advisors' increasingly positive perception of social media's usefulness in their practice."
The study also found that financial professionals' concerns about social media have shifted. Thirty-six percent of respondents listed regulatory or compliance issues as their No. 1 concern, down from 47 percent in 2010.
More advisors today say they are worried about company or home office restrictions on the use of social media, with 19 percent listing it as their top concern compared to just 14 percent in 2010.
Twenty-one percent of respondents said a potential breach of privacy is their top concern in 2014.
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