Does Social Media Fit in the Investment Advisory Business?

by | Feb 5, 2016 | Asset Management

For many years, social media appeared to not be a good match for the investment advisory business. It is important to know investment advisors CAN utilize social media for their practice and can also advertise on social media. However, having a presence on social media, and advertising on these social platforms needs to be done properly. Following ALL of the SEC guidelines and rulings on the usage of social media is extremely important. Please do your homework before engaging in any social media activity.

Before jumping in to social media, we strongly suggest investment advisors and their advisory firms review SEC restrictions or limitations on advisers using social media to advertise. Here is a good start:

Social media was simply another new way for people to connect with one another. But once investment advisers realized the capability and reach of social media, a light switch in adviser’s brains went off. Or at least it should have! Advisers can post various pieces of information on their social media sites, the same way they do on their firm’s websites, only the reach can be drastically greater.

Facebook has changed the world we live in forever. Staying in contact with people has never been easier. What investment adviser DOESN’T want to stay in contact with their clients, or even potential clients? Hopefully, all advisory firms DO want to keep their clients close, and keep their prospects even closer. Facebook is only one of numerous social media platforms available to do that.

Facebook, Twitter, YouTube, or even Instagram (yes, Instagram) should not take the place of a standard website for the firm, or take the place of a weekly email list. These social media hubs should be intertwined and used side by side. The need for advisers to stay in contact with their clients, and also broadcast their message to potential new clients should always be some of the top priorities in every day operations of a successful investment firm.

To help drive this point home, I want to share the story of Gary Vaynerchuk. Gary is one the most well-known individuals on social media. For those of you who don’t know who Gary is, I suggest you Google him, and check out some of his YouTube videos here (

One of the most valuable pieces of information I’ve picked up from Gary is “market in the year you live in.” That means, if it’s 2016, and you’re marketing your business like it’s still 1999, or even 2014, you’re not going to win! Businesses need to stay current and up to date on the latest trends and styles. This includes the investment advisory business, and sometimes people in the industry forget this important practice!

One of the most useful ways to reach people in your area is through Facebook Dark Posts. These posts allow a firm to run advertisements on Facebook, and directly attempt to reach people they want to target. For example, suppose you run social media marketing for your investment advisor practice, you can target ads to appear in front of folks who live in Manhattan, are 33-56 years old, are married, and like the New York Jets, YOU CAN DO THAT!

The amount of data Facebook has been able to collect over the years is truly hard to believe. Smart businesses can (and should) use this data to their advantage. The other great aspect of Dark Posts is that these posts do not show up on your firm’s Facebook wall, allowing you to test numerous different advertisements at the same time without appearing like you’re flooding people’s timelines with ads. To add onto that, the people who will see your ads DO NOT need to “Like” your Facebook page! And the cost of running Facebook ads is a FRACTION of what “old-school” advertising (i.e. Newspapers, TV, direct mail) currently cost.

As long as your firm has a Facebook page and strictly follows all of the SEC rules/guidelines/provisions for using social media, it should really be pretty simple. The ability to reach so many people in such a targeted area should be a clear advantage to the old school attempts at marketing. And it doesn’t just stop at Facebook.

Facebook, in my opinion, is the best social media site for advisers at the moment, but as we know technology is always changing. In the last few years, the app Instagram has really exploded onto the scene. Instagram was actually purchased by Facebook in 2012 for $1 billion! At the time “experts” thought Facebook was crazy and overpaid for Instagram. However, the investment Facebook made in Instagram has proved to be a worthy one.

Because Instagram is owned by Facebook, the advertising capabilities are almost identical. A firm can run an ad campaign on Instagram similar to the way they run it on Facebook. Why would investment advisers want to use Instagram though? Isn’t that just pictures that kids look at?

The growing population of the “millennial” age group is ALL OVER Instagram. While many of the big firms around the country aren’t interested in targeting young people, it could prove to be very beneficial for advisers who do. People fresh out of college might not have the big, attractive accounts that many advisers want, but what they do have is a HUGE need for advice. More and more young people enter the working world with little to no knowledge of what to do with their money, or how to get more of it. If an adviser were to run advertisements on an app that NEARLY ALL young people use EVERY SINGLE DAY, they would stand out and become very important in a young person’s financial life.

Helping young people get their financial affairs in order, and help them from the ground up would build an ever-growing relationship. And guess what? Those clients that you have had for 20-30 years now with big accounts, they started at the EXACT SAME point as these millennials. Wouldn’t it be a smart idea to utilize these relatively inexpensive advertising platforms to gain new, young clients and solidify your business for years to come?

Going back to Gary Vaynerchuk’s message about marketing in the year we live in, social media has a rightful place in the investment advisory industry. Investment Advisors might be foolish to sit on the sidelines while others take full advantage. The SEC has spoken on firm’s capabilities within utilizing social media. Feel free to check their insight on social media on their website (

While maintaining relationships with clients is very important, the most effective use of social media for advisers might be the advertising component of these sites. Without keeping in touch with clients – or bringing in new business – how does a firm expect to survive in this competitive industry?

The time to utilize social media is NOW. The only remaining question is, will you get in the game before it’s too late?