Advisors and firms looking to attract new customers and maintain existing client relationships should look to social media.

"We have to meet the client where they are - and that's online," says Clara Shih, CEO and founder of Hearsay Social, a San Francisco-based company that provides social media software to financial services firms.

Shih notes that about 1.5 billion people are on social media networks, from LinkedIn to Twitter to Facebook. "Social media is the key communication channel," she says.

Advisors, however, need to do more than just sign in; they need to post, tweet and make use of social media tools if they want clients to engage with them. "Just as you couldn't just get listed in the yellow pages and sit back, you can't just join a social media network and sit back. You have to be active," says Shih.

Shih argues that social media networks are the perfect tools to stay in contact with existing clients and to gain new clients. Many people turn to these online networks to get information and recommendations about products and services before paying for them, even for those that they will pay for offline. They are more welcoming, Shih says, to being contacted via social media because they are already communicating online with friends and family about their needs and what services are available.

Advisors can use these tools when clients or prospective clients post about so-called trigger events, which leads to a shift in a client's investment goals. For instance, the birth of a child may push a client to think about investing with the goal of paying for college.

And as clients look to their advisors for help with a wider range of financial and non-financial issues, social networks can help advisors meet some of those needs as well, argues Shih. "Social media is a cost effective way to do that while still being personalized," she says.

Wealth management firms, for their part, can also make use of social media for recruiting, Shih says. Prospective recruits are already on those networks, and firms can reach them that way.

And while younger advisors, Shih notes, more readily adopt social media into their business practices than older advisors, firm leaders can help their baby boomer advisors adopt these tools.

"You can lead by example," Shih says. "The most successful firms' leadership teams are signing up with social media networks."

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