By John Drachman, Financial Writer

Still another social media study offers proof that advisors, investors, and institutions are increasing their social media participation.

Study: Advisors turn to social media in greater numbers

According to a 2011 survey by American Century Investments, 71% of advisors had a personal or business Facebook profile and 55% are now on LinkedIn.

It’s the RIA world though that’s embracing social media the most.

MSNBC reports that Cambridge Investment Research unleashed the power of social networking to its advisors last year. This month saw Commonwealth Financial Network opening up the RSS feeds and everything else to its advisors.

There’s different media for different folks: Facebook way be right for close followers and customers, while LinkedIn can be ideal for networking with centers of influence. Many advisors are finding that tweeting highlights from a conference event to their followers act as on-the-spot reports to followers who couldn’t make the conference themselves.

One of the reasons for celebration has been FINRA, which has been as supportive of social media as it has been clear in its directives. Advisolocity’s Zach Hedges said recently, “FINRA likes the idea that asset managers are providing more information to investors. Having a written social media policy helps, too.”

His statement was borne out following the triple whammy in Japan — earthquake, tsunami and nuclear meltdown. Gaxiola Financial scored high marks from the press and public with their posted messages on Twitter and Facebook that investor exposure to Japan in client portfolios was minimal.

Social media is a two-way street, too. Investors can window shop and look around for the best advisor for their particular situation.

John Drachman can be reached at john@advisolocity.com

By John C. Drachman

With an open mind, a sense of experimentation, and a relatively small budget when compared to traditional marketing, smaller firms are finding themselves rewarded by fresh attention to their ideas and products through social media initiatives.

New strategies link small businesses to clients

For managers between $25 million and $1 billion in assets under management (AUM), social media marketing and networking offers the prospect of heightened media bandwidth for a lower cost than more traditional advertising programs.

The University of Maryland’s Smith School of Business looked at the relationship between social media and small businesses and found that the technology adoption rates in the U.S. have doubled in the past year from 12% to 24%.

Small is still beautiful

The data, undertaken by the University, is based on a December 2009 telephone survey of 500 small business owners. Adoption rate calculations are compared against a baseline report conducted in December 2008.

The study concludes that nearly one in five small business owners are integrating social media into their business processes — Facebook and LinkedIn were the most popular sites. In fact, 45% of surveyed respondents even believe their social media initiatives will pay off financially in 12 months or less.

Deploy more with less

If you have a small financial services firm, perhaps you have made decisions about adjusting your staffing and business model to the challenges of the current environment. Social media programs provide a way to deploy more resources and effort toward your distribution and marketing efforts without heavy additional costs

Even in uncertain recovery, many smaller businesses like yours are committed to expanding their presence, yet have little appetite for going back to business as usual.

The pattern that characterized the emergence from similar market environments in the past is not being repeated. The cycle of downsizing and staffing up has been altered as executives look to more efficient ways to motivate purchasing behavior through new combinations of technology and communications.

This article is a summary of an excerpt from “An Introduction to Social Media: A Guide for Smaller Money Managers.” Authored by R. Jeffrey Young, Huntington Asset Service, and D. Bruce Johnston, Advisolocity, downloadable copies of this report are available at http://www.advisolocity.com/huntington/

By D. Bruce Johnston, President and Chief Executive Officer, Advisolocity

There is good news about social media for smaller fund managers and advisors ahead.

Smaller Fund Managers Can Stand Out with Financial Social Media Marketing: Johnston

The new media platform has enough history to prove its cost-efficiency and value over traditional methods.

According to SocialWare’s Guide to Embracing Social Technologies in Regulated Industries, “The Altimeter Group found that companies with the highest levels of social media engagement increased revenues by 18% in the last 12 months, while the least active declined by 6%.”

While this alone doesn’t prove that all social media strategies have delivered, it does remove one of the barriers to trying a social media effort: social media has been proven to increase business.

A number of investment service providers and publications have been tackling the implications of the growing realization that revenue growth likes social media.

On August 3, Huntington Asset Services, formerly known as Unified Fund Services, will sponsor its first webinar on the topic of Using Social Media to Build Investor Awareness.

Interested investment industry professionals are invited to participate in the webinar by registering here.

The business-building implications of social media for liquidity-pinched financial services firms are growing larger. For example, recent data from marketing firm LederMark Communications underscores the growing popularity of these tools among financial services professionals.

According to that survey, up to 40% of all users say that social media strategies are helping them build new business. Research from Spectrem Consulting Group last spring delivered similar findings:

• 63% of Twitter users read tweets that offer financial advice
• 46% of YouTube users and 41% of Facebook users seek information from social networking investment forums

In addition to offering some practical guidance on how to use social media, the August 3 webinar also intends to feature insights on regulatory trends and archiving solutions.

Huntington Asset Services will continue to expand its social media marketing focus during its annual client meeting to be held September 12-13 in Indianapolis.

By John C. Drachman, Advisolocity

Will low budgets prevent marketers from taking advantage of  the Internet’s free bandwidth?

Taking advantage of free bandwidth

“Not likely,” says Advisolocity’s D. Bruce Johnston in his his recent post on Blackberry Blogosphere.

Social media types are taking heart from a study quoted by Marketing Pilgrim that while 40% of marketers report budgets down for the year, 70% plan to redeploy their resources from traditional print and advertising to Twitter and Facebook marketing.

“This resource shift is sure to accelerate as marketers and compliance officers now find common agreement,” Mr. Johnston said.

The release of FINRA’s 10-06 ruling has removed the last impediment to utilizing the cost-efficiencies and creativity of social media programs, he added.

Download your copy of FINRA 10-06 at the Advisolocity Resource Center

Can we expect a new social media marketing compliance lore to come into existence? Mr. Johnston thinks so: “Responsible, spontaneous, transparent communication can do a lot to put back the heart in this troubled (securities) industry.”

He pointed out three simple steps any marketer can take to heart as she undertakes a social media effort:

Archiving makes it easier to network.

1. Build a social media policy and follow it. If FINRA comes knocking hand them a copy
2. File product-related postings as usual
3. Treat blog and web site as connected, yet independent; with the blog focusing on thought leadership themes and the site offering products and services

“Simultaneously FINRA 10-06 has managed to strike a blow for common sense, fiduciary responsibility and freedom of speech,” he added.

While compliance officers  and investment marketers decode FINRA 10-06, financial advisors are embracing the new regulatory clarification.  According  to a Rydex AdvisorBenchmarking survey, advisors are looking to primarily use social media tools for “securing new clients (46%), enhancing communication with current clients (35%), and advertising or promoting their firms (30%).”

Over at financial research firm Nemertes, the social media cat is happily out of the compliance bag. “The new guidelines bring clarity,” a recent report stated, “but remove excuses for delay.”

Without delay, full speed ahead is required: Nemertes cautions the tidal wave of consultants, archivists, communications specialists, compliance firms and social media strategists, however, to get busy carefully: “Plan to converge or add social media features and capabilities with security solutions for communications media like email and IM.”