(Reuters) - Financial advisers in the United States are seeing fewer benefits from their use of social media, a survey by Aite Group showed on Tuesday.
Out of the 437 advisers surveyed, only 19 percent said social media was useful for reaching new prospective clients — roughly half the number from two years ago, when it was considered a leading benefit.
“Social media has been over-hyped and the benefits just aren’t there for a lot of advisers,” said Aite senior analyst Ron Shevlin in an interview.
The most frequently cited objective for using social media was to build brand awareness and differentiation. But the percentage of advisers who credit social media with helping them differentiate their practice from competitors dropped to 9 percent this year, from 21 percent in 2009.
“Most advisers practice in a relatively narrow geographic focus,” he said. “Not a whole lot of advisers in the suburbs of Boston will have clients in Seattle. These advisers aren’t looking for business in Mongolia or Malaysia.”
The one social media tool that saw an increase in advisers’ professional use was LinkedIn, up 10 percent since 2009. Comparatively, professional use of Facebook fell 10 percent, Twitter dropped 8 percent and personal blogging declined 9 percent.
The survey included a mix of independent advisers, wirehouse brokers and those working at other regional brokerage firms.
Shevlin said as the client base of financial advisers moves from the “Baby Boomer” age to the “Generation Y” group in the long term, there is potential for an increased use of social media among advisers, who will need to use the tools to connect with clients.
“Those that jumped into the fray between 2009 and 2011 are the laggards in using social media tools,” he said. “It’s not that the tools don’t work, it’s that they’re not making effective use of it right now.”
Reporting by Ashley Lau; Editing by Chelsea Emery