New Rules of Engagement: Social media strategies for great advisor-client relationships


Jul 8 • Practice Management, Social Media, Strategies • 21039 Views • 1 Comment

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Everybody in business knows this to be true: it’s way cheaper to retain a happy client than it is to acquire a new one.

But we know we need to acquire new clients in order to grow our businesses. And we rightly expect that we’ll succeed in doing so by building on the value we’re delivering to our existing clients.

All we need to do is ask our satisfied clients to recommend us – to their friends, their loved ones and their business colleagues. So that’s what we do.

The fact is, we’re often disappointed with the results.

Satisfaction, it turns out, is a necessary – though insufficient – condition for receiving referrals from existing clients.

So, what’s missing?

Engagement Drives Referrals From Clients

digital-technologiesAdvisor Impact’s Economics of Loyalty report found that while most of an advisor’s clients reported high levels of satisfaction with and loyalty to their advisors, only 1 in 5 of those clients actually provided a referral to their advisors.

When the report’s authors looked closer at which clients were giving referrals, they realized that there was another quality to the client-advisor relationship that seemed to correlate strongly with the act of making a referral. That quality is engagement.

In order to identify the drivers of this engagement, the Economics of Loyalty authors looked for common factors among those client-advisor relationships in which referrals occurred:

1. More attention – Engaged clients expected and received more frequent portfolio reviews and required more involvement of their advisor, though not necessarily because they represented more assets.

2. Written financial plan – Engaged clients were more likely to have written financial plan in place and felt that the plan was instrumental in helping them achieve their goals.

3. Coordinating role – Engaged clients were more likely to rely on their advisor to play a central role in their financial lives, for instance acting as a coordinator among the other professional advisors.

4. Advises offspring – Engaged clients with adult children were considerably more likely to have an advisor that also worked with their children.

5. Leadership – Engaged clients saw their advisor as a leader in terms of being proactive and keeping them on track, especially in turbulent times.

6. Opportunity for meaningful feedback – Engaged clients were dramatically more likely to have been asked for their input or feedback on the service being provided.

The new rules of engagement are social

Effective engagement is inspired by the empathy that develops simply by being human.
- Brian Solis

The drivers of client engagement revealed in the Economics of Loyalty data align strongly with the principles of effective social networking and inbound marketing and personal branding. Here’s how:

1. Social technologies allow you to do more with less time.

Social Media TechnologiesClients will always want more of your time and attention, so how do you realign your allocations of both so that your most engaged clients receive more? Time, after all, is a finite resource.

Enter social media technologies that give you the potential to leverage finite time resources by extending the reach of “personal” communication. These benefits are invisible to the uninitiated and don’t even reveal themselves until you’ve scaled the steep social media learning curve.

Here’s an example. In one-on-one meetings with clients, you often repeat information – offering the same analysis, observations and reassurances over and over to one client at a time.

An effective use of social technology would allow you to have a “social conversation” with select clients at the same time (imagine a LinkedIn group discussion for JUST your most engaged clients). You might also schedule regular Q & A sessions (think webinars or video conferences) where you could discuss key issues with your most engaged clients.

Social conversations and archived content assets enable you to cover common material once, freeing up time for you to deliver more valuable and personalized one-on-one client attention.

2. Attraction marketing is the new client “fencing”.

It used to be common for advisors to talk about building “fences” around clients as a retention strategy.

A much better strategy in the social age is to attract and retain clients by building a compelling service offering and fostering engagement.

Written financial plans are a case in point. They help map out a path and offer measurable milestones that promote accountability with your clients.

How Financial Advisors are leveraging digital marketing to differentiate themselves in a crowded marketplaceA dizzying array of new technology solutions for financial planning, personal budgeting, account aggregation, portfolio analysis and other investment services are appearing in the marketplace and luring your clients into relationship – with other service providers, rather than you.

It behooves you to understand these services and, in some cases, to incorporate them into your practice. Clients want tools that are easy to use and help them plan and track their progress, so give them what they want. Attract them. Engage them.

If you don’t, someone else out there just might.

3. Focus your social networking on peers and clients, not prospects.

Social NetworkingOnline social networks are emerging as the place where professionals – both clients and their advisors – go to find specialized knowledge and high-quality advice.

Establishing a competent presence in these networks is critical for at least two reasons:

a. to identify the thought-leaders on particular subjects that are relevant to your practice; and

b. to develop your own thought-leadership in your area of subject matter expertise.

Doing the first helps you identify and build relationships with the best in class professionals in any field. Doing the second helps you identify yourself as among the best in class professional in your field.

Social media is often misunderstood as primarily a tool for prospecting new clients. For a practice professional, using social media channels to build closer relationships with peers and fellow professionals is equally, if not more, important because of the critical role referrals and teamwork play when servicing your most engaged clients.

Being seen as a credible source of subject matter knowledge by your peers and having strong working relationships with similarly credible professionals in complementary practices will both attract referrals to you while delivering better engagement with your clients.

4. Changing demographics delineate the key battleground for financial services.

Intergenerational awareness, emotional intelligence and communication skills are highly valued by engaged, planning-oriented clients. Family well-being is often at the core of their values and define their financial goals and motives.

Social media technologies are being widely embraced by wealthy under-50 and Gen Y investors. At the same time, these younger investors are emerging as the key financial services battleground in the coming decade, as massive intergenerational wealth transfer occurs.

The key to working effectively across various demographic groups is understanding the world as each group sees it.

Digital technologies are remaking the world of interpersonal communications for many in the Gen X/Y group and this is changing how and where people meet and conduct relationships.

If you’re not an early adopter or part of the early majority when it comes to social media technologies, then you’re missing one of the best opportunities to engage your clients in this demographic.

5. Leadership and the economy of influence.

Engaged clients want to work with leaders.

They want their advisor to lead them in their financial decision-making and keep them on track with their financial plan. They also want their advisor to be a competent and recognized leader within their field.

Social media is creating new channels and opportunities for demonstrating leadership, yet at the same time it’s changing the face of what leadership looks like.

Social media is spawning a new economy of influence. Social interactions – everything from online conversations, to sharing posts, to liking and following – are the currency of this new economy. Strategic investment in these online interactions helps us build our social capital which, like any investment, accrues over time.

The new marketing paradigm of social media and the influence economy is inbound, rather than outbound. Inbound marketing attracts attention by providing content and information that people want. Outbound marketing, the old mass media paradigm of advertising and interruption, no longer works as well as it once did.

Social media for financial professionals should be guided first and foremost by earning influence and building social relationships online. If you do that successfully, the business will come to you.

6. Asking for feedback helps you to become a “trust agent”.

Asking for input from your clients lays the foundation for trust. Receiving input with transparency, honesty and a willingness to make things better breeds engagement .

Social media is an always on, real-time feedback mechanism. As you connect and engage with clients online, it becomes easier for them to interact with you and provide feedback.

In their book Trust Agents, Chris Brogan and Julien Smith borrow the trust equation, first introduced by Charles H. Green et. al. in The Trusted Advisor:

Trust = Credibility * Reliability * Intimacy
Self Interest

As we’ve seen above, using social media to find, create and share high quality content is a great strategy for building your credibility online. And you should strive for consistency online as a way to demonstrate your reliability.

Intimacy is a key element in the trust equation and it’s perhaps the most important lesson of social media: share your personality. People do business with people they know, like and trust. Social media networks are an ideal channel through which you can really connect with people by sharing who you are.


Social media technologies are transforming how we meet, stay connected and engage with each other.

It’s hard to imagine a future without the personal interaction that drives most people’s relationships with their financial assets and the person managing them.

But a whole new set of rules are redefining how we engage clients and build great relationships.

Jay Palter

Jay is a social business strategist and marketing expert specializing in social networking and personal branding for financial professionals and wealth management firms.

His business experience spans two decades, during which he has held a variety of leadership positions in financial services, software development and marketing. Jay was formerly a life-licensed insurance professional in Ontario.

Jay owns and operates an independent social media consulting practice and is a sought-after public speaker on social media strategies at financial industry conferences and events. He is a regularly published columnist in a variety of publications and is an active blogger, maintaining several of his own blogs available at and

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The above article is for educational purposes only. Investment professionals should consult their compliance departments before accessing or implementing any of the marketing ideas, practices or advice found in the DigitalFA. Your use of the DigitalFA website tells us you have read and agreed to our Terms of Service.

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One Response to New Rules of Engagement: Social media strategies for great advisor-client relationships

  1. […] Palter, J. (2014). New Rules of Engagement: Social Media strategies for great advisor-client relationships [Image]. Retrieved from… […]

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