Many financial advisers begin using LinkedIn without knowing how it will help their practice.
Experimenting, of course, is necessary with any new technology, but ultimately, advisers need to determine if, and how, they are going to incorporate LinkedIn into their businesses.
One way that advisers can use LinkedIn is to help accomplish the following objectives in building their practices: build relationships, attract prospects to a brand, better understand prospective clients and hand-pick specific prospects.
Building relationships. Advisers should always be looking to expand relationships with prospective clients, as well as strengthen and build their relationships with existing clients and strategic partners.
Once you have connected with a prospect on LinkedIn, the social networking site will notify you every time that person makes a change to their profile. These updates could provide advisers with an opportunities to reconnect with prospects.
For example, if a prospect has recently been promoted or hired for a new job, the adviser can shoot off a congratulations note.
Advisers can check their home page each morning to check for updates. Advisers may also want to review the profiles of their top prospects quarterly if they haven't been in contact.
Attracting prospects to a brand. Of these four business uses for LinkedIn, this is the only one with significant regulatory issues.
When seeking to understand or hand-pick prospects on LinkedIn, regulators don't require that correspondence be recorded or monitored. When using LinkedIn to build relationships, record-keeping requirements apply. But personal, one-on-one communication designed to enhance relationships usually will not violate the content regulations.
When attracting prospects to a brand, advisers are communicating their expertise, their services or their approach. Records need to be maintained, and rules followed.
Advisers should check with their firm's compliance department or compliance consultant for guidance.
Advisers can build their brands through joining groups and commenting in those groups. Brands are built most effectively when the messages are coordinated to demonstrate an adviser's knowledge and draw in other industry veterans.
Better understanding prospects. When advisers receive a referral, they usually ask their clients for as much information as possible about the prospect in order to prepare for an interview. Advisers can refine their referral process by using LinkedIn to search for information on prospects.
A complete profile will include an individual's employer and position, previous employers and positions, colleagues and friends, and hobbies and interests. This background can be very helpful in developing a client relationship and determining whether the client meets the firm's requirements, and can possibly uncover specific issues that the client may need to address.
Hand-picking specific prospects. Let's say an adviser wants to connect with more executives in his or her geographical area. The adviser already counts as clients four executives at a major employer in town and wants a strategy to expand beyond merely asking those clients for referrals.
LinkedIn can be part of the solution. In researching people affiliated with the company, an adviser may dig up dozens of vice presidents within 25 miles of his office.
The adviser can then check for connections among those candidates to see who can provide introductions.
This feature of LinkedIn can also be used for discrete searches: to look for the head of human resources at a firm, an attorney who specializes in elder law or a connection to a specific center of influence. LinkedIn can provide the names for searches and connections to make introductions.
This strategy is most often used when advisers are entering new markets or looking for a specific resources. Each of these four strategies can play a role in advisers' attracting new clients and building relationships with them. Of course, LinkedIn still needs to be supplemented by other traditional recruiting techniques, especially face-to-face contact, to help build an advisory practice.
John Comer is a certified financial planner and the founder of Comer Consulting LLC.
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