Practical analysis for investment professionals
09 November 2017

Social Selling: Building Relationships with the Clients of the Future

“I don’t connect with clients on social media.”

That’s the response many investment advisers give when I ask what they are doing around social. It can feel uncomfortable to risk messing up and getting it wrong, and finance is an industry where compliance rules abound. Yet my advice is to focus on what can go right with social media, not on what can go wrong.

You need to be using social media. Call it social selling. It is not a replacement for traditional, proven selling practices, but in today’s world, you have no choice but to incorporate it into your daily life as an adviser.

What is social selling? Writer and editor Christina Newberry defined it this way:

“Social selling is the art of using social networks to find, connect with, understand, and nurture sales prospects. It’s the modern way to develop meaningful relationships with potential customers that keep you — and your brand — front of mind, so you’re the natural first point of contact when a prospect is ready to buy.”

Think of an active social media presence as an effective and persuasive extension of your personal brand.

Who are the financial customers of the future?

The authors of the Pew Research Center’s “Social Media Update 2016” report:

“Nearly eight-in-ten online Americans (79%) now use Facebook, more than double the share that uses Twitter (24%), Pinterest (31%), Instagram (32%) or LinkedIn (29%). . . . Instagram use is especially high among younger adults. Roughly six-in-ten online adults ages 18-29 (59%) use Instagram, nearly double the share among 30- to 49-year-olds (33%) and more than seven times the share among those 65 and older (8%).”

“Women continue to use Facebook at somewhat higher rates than men: 83% of female internet users and 75% of male internet users are Facebook adopters. And female internet users are more likely to use Instagram than men (38% vs. 26%).”

How can social selling help secure relationships with the customers of the future?

Social media is a client attraction tool. Your brand reputation is the draw. A strong brand reputation is attractive. Personal brands are becoming as powerful as corporate brands. Influencers are carrying more and more weight due to the viral nature of social media.

The business of wealth management has become similar to the business of luxury brands. David Dubois, INSEAD Assistant Professor of Marketing, wrote that: “The digital world has leveled the playing field and given these individuals sometimes more sway and energy than an entire brand. Their followers can count in the millions. By pushing their own content and speaking in their own name, influencers appear more authentic and trustworthy than corporate brands.”

Social media is a communication tool to meet people where they are. The customers of the future embrace modern communication. And social media lets advisers know how these customers think, what their interests are, and what scares them.

This data can help us to educate our clients on their terms, their preferred platforms, and on their own devices.

The Financial Times published a fascinating article, “The Secret Lives of Children and Their Phones,” in which Madhumita Murgia detailed why you need to meet these future customers where they live:

  • “They’re the real denizens of the virtual world — the super-users of new apps, the earliest adopters of new forms of social media, the connoisseurs of online entertainment, and harshest critics when these technologies don’t meet their standards.”
  • “Social media has made people my age feel more open about what they can share. . . . I feel my generation is more compassionate and open-minded.”
  • And critically, “Each platform is distinct, in the same way that previous generations would see a telephone and a television as different.”

The best way to access the younger generations is to treat them as individuals and with respect. The best way to attract women clients is to make their lives easier. Connect with both on their favorite social platform.

Shira Abel, CEO of Hunter and Bard, explained, “Women are extremely savvy, both about money and about technology, and as technology advances, it is becoming increasingly easy to do your own investing. I have seven financial apps on my phone! Mobile has changed my life completely when it comes to money. The financial industry needs to simplify to make it easier for women to get into financial products. If they educate the consumer in a respectful way the customer will respond in turn.”

Social media is a networking tool. Be generous with your contact list. Kirsi Larkiala, a board member of Grannenfelt Finance in Helsinki, Finland, is ranked on the global Fintech 2016 Top 100 Influencers list. Her advice: “A big part of an adviser’s job is to facilitate networking. I think advisers should talk to their younger clients and treat them as individuals. Ask them the following three questions:

  1. “What are you trying to accomplish in your career?”
  2. “How can I help you?”
  3. “Who do you need or want to meet?”

“Gen X and millennials don’t start with the same level of loyalty and trust. They are looking to find out how they can benefit, and they will want to have your help with networking.”

Women are all about relationships and connections. We love to share. I am no exception.

Personal referrals are worth their weight in gold. They are how I find smart women for my Rich Thinking research.

I know that I will be speaking at CFA Society events in Stockholm, Sweden, and Warsaw, Poland, this month. Who should I invite? I do a quick search on LinkedIn by the city, and instantly have a customized list of names! Whatever your age or gender, social media platforms are a fantastic resource for curating your own personal list of global contacts.

How has social media changed the game for advisers?

Social media has changed the way that customers inform themselves about investment opportunities, how they find people to manage their money, and how they communicate with their investment advisers.

Social selling is real. Salesforce’s recent “The Biggest Differences Between Cold Calling and Social Selling” has some great tips: “On social media, you’re playing the long game — offering ideas, sharing insights from others, and offering feedback that proves you’re genuinely relevant to the person you’re trying to attract.”

April Rudin, global wealth management strategist and founder of the Rudin Group, had some ideas about how advisers can best use social media: “There is no right way and there is no wrong way to use social media. You have the grand opportunity to put forth ideas that are unique to you. This gives prospective clients a chance to get to know you before they meet you in person.”

What are the virtues and vices of the main social media platforms?

Each platform has pros and cons driven largely by user behavior. Here are some of my own thoughts on the various platforms:

LinkedIn: In addition to a superb contact database, LinkedIn can be a highly effective prospecting tool. In the old days, you would make cold calls or attend conferences when looking for new clients. Today, you can write blogs and post your thoughts.

Some years ago, I received a note via LinkedIn from a young CEO who had just sold his company for $10 million. He didn’t have my business card, but he had previously connected with me on LinkedIn. He had been following my writing over the years and had built up a feeling of trust about me.

Think about quality over quantity. Your contacts will judge the relevance of your posts. Add value or else don’t post.

Twitter: Twitter is a great vehicle for the efficient dissemination of information. Would you like your clients and prospects to know your perspective on current market news? Tweet a quick comment or relevant story. Users are free to comment, analyze, and share in real time to their own networks.

A word of caution: Twitter trolls are real. Twitter handles aren’t necessarily recognizable names, so users can be quick to make nasty comments on your posts for all to see. A stiff upper lip may be required at times.

Facebook: Facebook is now a business tool. A few years ago I was concerned about “friending” my clients. Wasn’t that a bit too personal? But over time I came to understand why it can be a good idea to share more of yourself with your clients.

One of my more sophisticated investors had always been direct and businesslike in our portfolio review meetings. But then she friended me on Facebook. A short while after, she shared one of my silly cartoons. I was surprised to see this aspect of her personality, but when I stopped to think about it, I realized that social media allows us to see a softer side of each other and this is another way to build closer, more trusting relationships.

Yes, Facebook can be a little too transparent, so think before you post. Remember that your top client will see your “interesting” photo or passionate rant. Wait. Do you still think it makes sense to post?

Pinterest and Instagram: Given the rise in Instagram use among women, Gen Xers, and millennials, advisers should keep an eye on their clients’ posts. Do you see a photo of their vacation? A new cottage? A hobby? They’re all great reasons to get in touch and offer congratulations or to pursue a more in-depth discussion.

The bottom line: Don’t just lurk.

As Rudin eloquently explained in her recent blog post, “The Forgotten Generation X,” “Embracing technology and communicating your unique value proposition are winning strategies no matter your target generation.”

Social selling works. Having a strong online presence will make you more of a draw. Especially with the customers of the future.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images/Fanatic Studio

About the Author(s)
Barbara Stewart, CFA

Barbara Stewart is a chartered financial analyst (CFA) with 30 years of investment industry experience; five years as a foreign currency trader, more than two decades as a portfolio manager for high net worth entrepreneurs, and during the past six years, as an interview-driven researcher for multiple global financial institutions. She is a keynote speaker for CFA societies, banks, stock exchanges, and industry conferences globally, and she is a columnist for CFA Institute, Canadian Family Offices, and Canadian Money Saver. She is on the Advisory Board for Kensington Capital Partners and also is the Ambassador for the Kensington Women’s Forum. Fourteen years ago, Stewart saw a need to challenge outdated financial industry stereotypes and share positive messages about women and money. Today, she is recognized worldwide as one of the leading researchers in women and finance. Rich Thinking® global research papers quote smart women and men of all ages, professions, and countries, and are released annually on International Women’s Day, 8 March. To find out more about her research, visit Barbara Stewart.

1 thought on “Social Selling: Building Relationships with the Clients of the Future”

  1. Dominique says:

    Fully agreed that Social Selling is key. The thing that bothers me is that most people equate social selling to “distributing content”.

    That’s not the approach that I would recommend. Social Selling is a Networking play so:
    #1 study and find the 100’s of prospects you’d like to connect with
    #2 listen, help and network. don’t sell.

    I am not saying that you should not distribute content. It is important too but to make a parallel with real life / conferences. It’s like handing out pencils or wearing your broker hat as a conference.

    If you’re an advisor at Morgan Stanley, Merrill Lynch …. distributing content is great for your broker. Listening and engaging with people whom you need to do business with is critical for YOU.


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