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Why You Can’t Afford to Ignore Social Media

Use it effectively and you can expand your reach, grow your business and establish yourself as an expert.

By Laurence Greenberg

Communicating with clients and reaching new prospects are critical for maintaining and growing your business. In today’s marketplace, investors have become increasingly selective—and you need effective methods to establish yourself as a credible expert. There are “new rules” for this rapidly changing environment to help you capture the power of instant online communications. By using blogs, forums and other social media, you can expand your reach, grow your business and establish yourself as a true “thought leader.”

Grow your practice
Dan Sommer, an expert on social media and CEO of Caridan Marketing Labs, says, “Social media gives you simple, scalable tools and technologies to connect with your current network and make new contacts. Think of the networking you already do—and imagine it happening faster, reaching farther and with much greater transparency. That’s social media.”

There are several channels for social media. The most common include:

Blogs: These are similar to an online journal. Most blogs combine commentary on a specific topic, images, links to other websites—even links to other blogs. Several special search engines are used to search blog content, including Bloglines, BlogScope and Technorati.

Forums: These are also known as chat rooms and are good for conversations and posting quick comments. Many forums are highly targeted to specific communities. Forums often include a moderator and require participants to register.

Social networks: These are online communities linking members based on mutual interests. Members often create a personalized profile, and connect with others via email, chat and special interest groups. LinkedIn (, Facebook and MySpace are popular social networks.

Deepening relationships
Social media lets you deliver a steady stream of targeted communications and educational materials to a broad group of clients—while still maintaining a level of intimacy and your unique personality.

Another benefit is immediacy. Financial advisor Scott Dauenhauer, CFP, MSFP, principal and owner of Meridian Wealth Management, has been blogging at for more than five years. It was during the recent financial crisis that blogging became truly essential for him and his clients. While the market was in free fall, many advisors were scrambling to calm clients and regain their trust. Dauenhauer used his blog to provide instant analysis and insight in an extremely personal format. “I read a lot. If it interests me, if it’s good for my clients, I post it to my blog,” Dauenhauer says. “During the crisis, I was posting almost daily—news from all the major sources as well as my own commentary. The feedback was great. Clients would say, ‘I read your blog. Thank you so much. That article was just what I needed.’”

If you do not have a blog, many easy-to-use tools are available for free or low cost, including, and If you already have a blog, stay active by posting original content or highlighting news from other sources. Build your list of subscribers by including a link to your blog in your email signature, your business card and other marketing materials. Also contribute comments to other blogs to reach more readers—and more potential clients.

Grow your network
Social networks can help you reach more prospects. “Have you ever wanted to know the business owners and executives that are one or two degrees of separation from you?” Sommer asks. “You can find out through LinkedIn simply by uploading your address book and connecting with people you already know.” If you use Microsoft Outlook or a similar program, LinkedIn can sync with your address book and find your connections. To attract more connections, be sure to optimize your profile by including your professional background, areas of expertise, credentials and affiliations.

Blogs are also an effective prospecting tool, Dauenhauer says. “Every month, I pick four to six of my top blog posts, package them into an email and send them to my clients. Clients forward it to their friends. And it becomes viral. Very fast,” he says. “My clients are constantly telling others about my blog—and they’ve become my clients.”

Share best practices
There are thousands of niche networks to serve every interest group and industry. There are more than 400 investment-related groups on LinkedIn alone. These advisor-only networks offer a wealth of insight on growing and managing your practice. And nothing helps to establish you as a thought leader like sharing best practices with others in your field.

Building a social media campaign takes time. To ensure success, follow these helpful hints:

Do work with legal and compliance. Social media is new and regulatory guidelines are evolving. Commentary posted in a public forum should be treated like advertising, so be sure your legal and compliance department review in advance to protect your firm and your clients. And remember, Rule 206(4) of the Investment Advisor Act of 1940 is clear: Financial advisors are prohibited from using testimonials about themselves or their work in any way.

Do not be overly promotional. Social media is about networking and making connections. A direct sales pitch is the fastest way to turn off other members.

Do not address service issues or confidential matters. Should issues arise, make it clear that service is your top priority. Provide a number where members can contact you or your service team directly—and confidentially.

Do stay active. Publish an online newsletter. Contribute to blogs. Share useful articles and links. Post comments, answer questions and start conversations. Update your profile as you join new organizations and clubs. And whatever you do, be sure to let the members in your network know.

Laurence P. Greenberg is president and CEO of Jefferson National, innovators of the first flat-insurance fee VA with the industry's largest supermarket of tax-deferred funds. Visit or call 1-866-WHY-FLAT.

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