American Century Investments Study Shows Many Financial Professionals See Potential of Social Media

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American Century Investments surveyed financial professionals regarding their use of social media.


the leading asset management firms are using social media to their advantage.

Although it’s early yet, financial intermediaries – and asset managers -- would be foolish to ignore social media trends.

According to an American Century Investments study of financial professionals – including financial planners, brokers and registered investment advisors -- 44% of advisors who use social media for business or business and personal use agree that social media is an emerging trend with significant potential for businesses like theirs, while only 26% rank social media as having value to their business.

“We know that financial professionals are still in the early stages of adopting social media as a viable tool to build their business, but many recognize its long-term potential,” said Jennifer Sussman, director, Online Marketing and Experience for American Century Investments.     

The study gauged financial intermediaries’ attitudes toward and usage of “newer” social media such as Twitter, LinkedIn, Facebook, YouTube and MySpace.

In general, 73% of the participants have a profile or account with one or more of the social media types mentioned. Facebook was in the top position with 55% and LinkedIn was next with 46%.

Among those who use social media, Facebook had the highest percentage of respondents with accounts, but most indicated “personal use only.” LinkedIn had the highest percentage indicating business use or business and personal use.

General Findings – Social Media Business Users    
Of those who use social media for business purposes, almost one-fifth (19%) do so daily – either once a day or multiple times a day – but 49% use it less than once per week.

Respondents reported their top three business uses of social media as researching people (e.g. prospects, contacts and current clients), monitoring industry and market news and reading expert commentary and insights. In fact, 71% reported they have one or more future business uses planned for social media, primarily monitoring industry and market news, followed by reading expert commentary and insights and researching people.

When asked what types of information they would like to receive from asset managers via social media, the most common category mentioned was industry and market news, including updates, content, articles, trends and projections. Other categories named included commentary, insights and expert opinions, company information and general updates. Nearly one-fourth of the respondents stated they didn’t want to receive information via social media and almost 10% indicated they didn’t know what they wanted.

Technology Changing Faster than Regulations
Nearly half (47%) of respondents named regulatory or compliance issues as their single biggest concern with using social media for business purposes. Concerns about a potential privacy breach came in second at 21%, followed by company of home office restrictions on use at 14%. “This indicates to us that understanding how to better navigate compliance guidelines and industry regulations on social media use could bring peace of mind to financial professionals and spur adoption of its use,” Sussman said.

Advisors See Potential Advantages/Uses in Future
More than 40% expressed some level of optimism or positive feelings toward social media as a tool to grow their business. Comments included opinions such as “Positive,” “very useful,” “important” and “good tool.” Roughly one-fourth of respondents conveyed negative comments or opinions; nearly one-third expressed no opinion or were neutral on the topic of social media for their business.

Concerning the overall value of social media to the success of their business, 21% rated it as having “highest value” (6 or greater on a scale of 1 to 10).

Nearly half (44%) agree that social media is an “emerging trend with significant future potential” for businesses like theirs and 42% disagree that “social media is a fad with little value for business.” However, only 14% agree that social media is “already producing tangible results” for their business.

Asset Managers’ Use of Social Media
Slightly more than one third expressed optimistic or positive attitudes (e.g. “Good idea,” “useful,” “cost effective”) about asset managers’ use of social media to engage clients; roughly the same number expressed no opinion and nearly a third felt negatively about the topic. Additionally, the vast majority of respondents (86%) were not familiar with any asset management firms that use social media to communicate with clients.

When asked what types of information respondents would like to receive from asset managers via social media, “general information” such as news, updates, content, articles, trends and projections were mentioned most often.

Sentiment is mixed when it comes to asset managers’ use of social media. Although 42% of respondents disagree that “social media is a wise use of asset management firms’ time and resources,” 41% agree that asset managers are “smart to explore social media” and 40% agree that asset management firms “are not yet seeing the value of social media.”

Only 11% agree that “the leading asset management firms are using social media to their advantage.” A majority of advisors (86%) are unfamiliar with efforts by asset management firms to engage clients via social media. “Again, these findings suggest a clear communication opportunity for asset management firms,” said Sussman.

Survey Background
The results of the American Century Investments social media research project were drawn from online surveys of 303 financial professionals who are employed as financial advisors, brokers or registered investment advisors. Survey participants were members of e-Rewards, the largest “by-invitation-only” online research panel provider. Meridian Marketing handled data collection and data weighting functions. Study participants averaged 14 years in the financial industry; 73% were male and the average age was 46.

About American Century Investments
American Century Investments is a leading privately-held investment management firm, committed to delivering superior investment performance and building long-term client relationships since 1958. Serving investment professionals, institutions, corporations and individual investors, American Century Investments offers a variety of actively managed investment disciplines through an array of products including mutual funds, institutional separate accounts, commingled trusts and sub-advisory accounts. The company's 1,300 employees serve clients from offices in New York; London; Hong Kong; Mountain View, Calif. and Kansas City, Mo. James E. Stowers Jr. founded the company, Jonathan S. Thomas is president and chief executive officer and Enrique Chang is chief investment officer. Through its ownership structure, more than 40 percent of American Century Investments' profits support research to help find cures for genetically-based diseases
including cancer, diabetes and dementia.


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Laura Kouri

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