Social media for IFAs: A fad or to sell their services

Dec 16, 2016 / Vinayak Sapre | 19 Downloaded |  6547 Viewed | | | 3.0 |  11 votes | Rate this Article
Financial Advisory article in Advisorkhoj - Social media for IFAs: A fad or to sell their services
Picture courtesy - PIXABAY

The question has been haunting me for the last three years since I attended a training program on usage of social media in an IFA’s business. The program covered Facebook, Hoot suite, Quora, Twitter, Linked-in and one more platform which shows your score on social media. I don’t even remember its name. I believe that must be the case with many people who attended that workshop.

Recently I met a senior AMC person in reference to coaching, and he asked why you don’t have a module on usage of social media in an IFA business. I reciprocated, why should I have? Pat came the reply, so that IFA can sell his/her services on social media. I asked, then who will service the existing clients and the references he/she gets from the existing clients, especially when most of the IFA outfits are run by a single person. After a long discussion he said it’s a fashion to have and being a well - wisher of yours I would suggest you should have. That discussion we can have on some other day.

Let’s look at the most popular social media platforms, one by one:

Facebook: According to me it’s a great platform for people like beauticians, writers, event management companies, AMCs, Insurance companies etc. where they can showcase their work. A make-up artist can showcase their skills by showing the pictures of celebrities, how a person’s makeover can be done. An AMC can show the performance for selling DIRECT Plan, same is the case with insurance companies. An event management or celebrity management company can showcase the scale at which they work.

I don’t know how many IFAS can show their model portfolio on FB, they need to have it in first place, how the model portfolio has been able to beat equity funds, etc. But this actually doesn’t make sense because model portfolio ideally should have mix of equity and debt as per the risk profile of the client (again how many actually do that). So, eventually what an IFA will showcase, fund performance, in which he/she doesn’t have any role to play. At the most IFA can put testimonial on FB wall to attract new clients. How many clients will be comfortable writing testimonial and later to be posted on Facebook.

With stringent regulatory norms it is very risky to post fund performance on your wall. It is probably riskier than investing itself. Facebook is a platform where people react to your posts and can be seen by many. However there are provisions for privacy but if one wants to be so private why he or she should be on Facebook to promote the services. These reactions or conversations may have a bad impression on your clients. For example - your childhood friend can be very free with you and may use the language for you who may not go well with your clients and they may create a biased view against you.

Twitter: Most sought after platform used mainly by politicians, celebrities, and media personalities to create buzz in 140 characters. Can an IFA showcase the expertise in 140 characters? Then the tweets need to be interesting, catchy and maybe controversial to attract followers.

Linked-in: This is one platform, I believe, is most useful for attracting and engaging with potential clients. One may join various groups. Someone with good writing and networking skill can definitely do great on this platform. Having said that, mostly one may find people in salaried class across all levels. After leaving the job for five years I still get requests of job seekers and HR consultants.

Lastly, reality check: In the last five years, especially when people got excited about this space, I doubt if more than five IFAs across India in 500 Crore AUM club have got benefited or used these media vehicles. Not more than 10 people across India have moved from 100 Crore to 200 Crore because of social media, this is my estimate based on my interaction with IFAs across the country. All these people focus on their strength and invest on improving their skills. The core is engaging with clients in a meaningful way. Our job is not to create BUZZ but to create happy investors. At one hand we are better than ROBOTs because we are always client facing and are more engaged with the client and on the other hand should we try acquiring clients through mediums which is not our core strength?

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