“You need to figure out where your target audience is spending their time and where they might join in the future.”
From TikTok to Clubhouse to Discord, young Americans are flocking to social networks that many wealth managers have never heard of, let alone used. For financial advisors, keeping up with new apps and trends can feel like digital whack-a-mole. It seems every time a platform or strategy gains traction, a new one emerges.
Nimbleness is of utmost importance if advisors hope to keep up with the platforms Generation Y is embracing today and Millennials, Generation Z, and even Boomers, might take up tomorrow.
Many advisors think that social media effectively consists of Facebook, Twitter, and LinkedIn. Not so. Newer entrants such as TikTok, Clubhouse, and Discord deserve attention alongside established heavyweights like Instagram and YouTube. That’s because their core users are trendsetting, digital savvy young Americans and future investors, noted Dr. Merav Ozair, Assistant Professor of Professional Practice at the Rutgers Business School.
[Like this article? Subscribe to RIA Intel’s' thrice-weekly newsletter.]
“They may not have the money that the people in the 40s, 50s, and 60s have, but they are starting careers, getting married, having families, and thinking about investing,” she said.
Ozair’s own undergraduate and graduate students serve as a model. She said they rely on social media to find community and gather information. To successfully engage young consumers, she said financial advisors need to integrate themselves authentically. If advisors advertise push their businesses, that’s a turnoff. But, if they join groups and offer expertise and knowledge, she said advisors can build trusted relationships — and perhaps someday customers.
“If you educate them and provide them with information, then they are more likely to listen,” she said. “If you become one of the group, and become one of them, that’s how you become influential.”
As the Covid-19 pandemic continues to disrupt normal patterns of business, RIAs have leaned into social media to interact with existing clients, generate new leads, and build their brands. Last year, three-quarters of U.S. financial advisors who use social media said they used platforms to sign or onboard clients, and of those that used social to interact with new clients, half said they were using social more than ever, according to Putnam Investors’ latest survey on social media usage.
As Americans spend more time on social media, they’re increasingly willing to take advice from social influencers, said Laura Bright, associate professor at University of Texas at Austin’s Stan Richards School of Advertising & Public Relations in the Moody College of Communication. More Americans are getting their news from their favorite social networks, rather than local news, which Bright said creates an opening for financial advisors.
“They’re conditioned to getting news and trustworthy information on these platforms, so having financial advisors sharing information there wouldn’t be out of the blue,” she said.
While it’s easy to sign up for TikTok or Reddit and start creating content, aimlessly posting isn’t a cohesive strategy. Just as RIAs develop a plan for their clients’ money, advisors need to chart a plan for social and be consistent.
“It really bothers me when I see people with a boat with no rudder,” said Sara Grillo, a former financial advisor who now advises on digital marketing. “They’re going it about with no focus, wasting time and money, and thinking they’re doing something positive for their brand.”
Some advisors might dismiss TikTok or Clubhouse as passing fascinations for young people that lack money to invest. Big mistake, said Twenty Over Ten’s Digital Strategist Samantha Russell. Instead of focusing on where users have spent their time in the past, she urges advisors to look ahead. While Facebook and LinkedIn are trending older, more Gen Z and Millennials are signing onto TikTok, Discord, Reddit, and Clubhouse.
“You need to figure out where your target audience is spending their time and where they might join in the future,” Russell said.
But what network should an advisor choose? Pick a platform and medium that you actually enjoy, said Rick Valenzi, Founder and CEO of Financial Zen Group. Valenzi used to write a weekly blog, but said he dreaded the process. Recently, he pivoted to creating regular YouTube videos where he discusses financial education and literacy and said he feels reinvigorated. “I hated writing that blog,” Valenzi said. “YouTube is super fun; I shoot videos with my phone and it excites me.” In the future, Valenzi plans to add videos to Instagram Stories and TikTok.
For advisors that like to be on camera, this is a good time to join TikTok. The hashtag #TikTokFinance is trending with 15.1 million viewers, yet there are few reputable financial experts on the platform. One early exception is Dr. Brad Klontz, a CFP, Managing Principal of the firm Your Mental Wealth Advisors and an associate professor at Creighton University Heider College of Business. His teenage nephews introduced him to the network in 2019, and he found a stream full of clips promoting day trading, many with bad information. He joined to promote authentic financial education.
Since then, posting as @drbradklontz, Klontz has made more than 1,000 short videos, many offering nuggets of wisdom as well as unabashed tomfoolery. Klontz says his presence also helps his business. TikTok users send him direct messages, often via Instagram, asking for financial advice, and he has signed about five new clients as a result. It also inspired his RIA to launch an investment platform for individuals with fewer assets than its traditional wealth management clients.
On TikTok, Klontz said self-professed financial whizzes are sharing misinformation without credentials or expertise. By creating their own short, engaging videos with factual information, he said advisors can help educate users and build their own credibility.
“Talk about the basics, like financial planning 101,” he said. To appear in more people’s feeds, he said advisors should use relevant hashtags — #personalfinance is one of his favorites — and include key words in the text.
If video isn’t your thing, audio is another red-hot medium. For that, Clubhouse is an audio-only network where users can listen into “rooms” for live chats and conversations. The app is still in beta form, making it early innings for even the most tech-savvy financial advisors. Klotz has hosted a few discussions, and sees potential. He said Clubhouse could be an asset for an advisor who isn’t ready to invest time and money into podcasting.
“I’ve thought I should do a podcast, but then I’d have to produce it, script it, and find guests,” he said. “Clubhouse takes all that away. You can just talk; it lowered all the barriers to audio.”
Another early Clubhouser is Akeiva Ellis, a CFP and Financial Education Specialist for Ballentine Partners, who is also a Certified Financial Board of Standards Ambassador. She said advisors could activate Clubhouse to connect with early adopters and vary their content formats. “I’ve noticed some people are using it to supplement or replace webinars,” Ellis said.
Before posting to TikTok or hosting on Clubhouse, Ellis said advisors should start by signing up and experimenting. She said many advisors rush to start creating content on new social networks, and don’t spend time on user experience and learning the algorithms. By exploring, commenting, and sharing as a user, she said, “You can get your hands around the best practices for that platform.”