30th June 2010

USA today, UK tomorrow?

USA today, UK tomorrow?

Social media, the next big wave for financial advisors?

In light of the recent FSA Industry Update number 5 on Social Media and financial promotion rules, the take on social media from across the "pond' is somewhat different.

From the young to the old, the use of the Web has dramatically, and permanently, changed the way people conduct both their personal and professional lives. Yet back in the early 1990s when it became part of the Internet, many wondered how significant it could really be, especially in the business world. It was hard to imagine that some companies would transact all of their sales online, and Web sites would be accessed from the coffee shop using Wi-Fi, or via cell phones and handheld devices.

Now the buzz is all about social media and, once again, many wonder how significant it will be as we look into the future. Yet the statistics are staggering. In December 2009 there were over 307 million unique users on global social networking sites, with Facebook accounting for 67% of the traffic. In the same month in the U.S., time spent on social networking and blog sites had increased 210% in just one year, Facebook had over 115 million visitors, and Twitter over 23 million.

With Panacea being a leading example of what the web can do for Product Providers and IFA businesses you too can look at what the social media landscape looks like, and what implications might it have for you as a financial advisor- financial promotion rules apart? Can it really help you to effectively network with other financial professionals, reach centres of influence, and learn more about prospective clients - all online?

This excellent paper produced by Fidelity institutional Wealth Services, Boston, USA is designed to provide you with background information on social media, and possible steps you can take to learn more about how it might be used in your business.

The IFA industry has great digital potential as one would expect. The inextricable link between the IFA business and the wider financial services market is manifested as a correlation between strong query growth in one space and the other (specific IFA terms and those pertaining to wider financial services market). Fig 8 in a new paper produced by Google, which focuses on the state of digital advertising in the UK and the opportunities in 2010 for the online financial advice market, illustrates this growth over the past few years with seasonality around key IFA products (e.g. ISA season) becoming more pronounced in recent years

This new paper, produced by Google, focuses on the state of digital advertising in the UK and the opportunities in 2010 for the online financial advice market.

Google is doing some interesting work for IFAs at their official Google Loves IFAs website. They believe that the online marketplace represents an exciting opportunity for you as an IFA and have committed to providing support in exploring and developing this.

In Q1 of 2010 there were over 50,000 searches for the term 'IFA' alone. The demand for financial advice has grown strongly over the course of the recession as consumers flocked to the internet to be become more self directed and informed on the choices they were making around their finances. Search for the term 'unbiased financial advice' alone has grown 84% between February 2008 and February 2010 indicating a huge opportunity for the IFA industry to capitalise on this.

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