Back when I interned the online community was different. Facebook was only available to college students, LinkedIn was unpopular and Twitter wasn’t even invented. Needless to say, the world has changed.

There are now over 300 million active Facebook users. LinkedIn has over 43 million registered users in 170 different industries. Twitter is growing at ridiculous rates. People are using social networks to talk to each other about what they’re doing, why they’re happy, why they’re sad, what’s frustrating them, what’s new and what’s exciting. People are using social networks to connect with old friends, to develop new relationships and to keep in touch with family and friends.

But before I get into why financial reps should use social networks, I need to make sure the basic rules are clear: A financial advisor must work within guidelines set by their respective corporate legal departments that are based on interpretations of guidelines set by FINRA and the SEC. Here are a few suggestions that apply to most companies: A financial advisor cannot talk business on social networks. Don’t use social media to advertise (or even mention) products your company sells, to ask your friends to come into your office to talk about their financial plans, to talk about how great your company is or to rant about how bad your competitors are. You can use approved materials your company has released, but don’t go making up your own advertising material. Be sure to ask your compliance department for a list of what is appropriate.

So why should you be using social networks? Here are the top six reasons:

1. It’s where your clients hang out – As I already mentioned, there are hundreds of millions of people using these networks. And it’s not just kids. The fastest growing demographic on Facebook are those 35 and older. The only way you’re going to sell your services is by getting in front of people. If you want to get in front of people, you have to travel to where they are.
2. Build personal awareness – How often do you meet with your clients? Once or twice a year? Do you have to remind your B or C clients who you are? Social networks give you a way to remind clients that you exist. They‘ll see pictures of your family, learn about what interests you, see your updates and understand who you are as a person (not just a financial advisor). The next time you call them, your clients will know who you are and be more interested in talking to you.
3. Build client loyalty – How many times have clients or prospects transferred their business to another advisor who was cheaper or more accessible? Probably a few times. Now, how many times has that happened with close friends or family? Hopefully, never. The reason you retain friends and family is because they’re loyal to you. As you connect on a deeper level with people through social networks, you’re suddenly a friend instead of just an advisor. You will retain more business as a result.
4. Get more referrals – One of the great lessons I learned in my internship was that referrals are the best way to get new clients. Social networks are a great resource for getting referrals! You can see the people your friends are connected with and ask for introductions. If you search for someone you want to meet, you can see who you’re mutually connected with. By utilizing these networks properly, you can greatly increase your prospecting pool.
5. Have more fun connecting – You can spend your time cold calling and hating life if you want, or you can reach out to someone on social networks. It can be a really enjoyable prospecting tool if used correctly. And while you can’t talk about business directly on social networks, you can invite people to lunch, golf, ski or any other activity.
6. If you don’t do it, someone else will – If you’re not engaging with your clients over social networks, some other financial advisor is. He’s becoming friends with your clients, commenting on their pictures, sending them witty messages and building a relationship that you don’t have. Sooner or later that financial advisor is going to take them out to lunch and steal your business. Don’t let that happen to you. If you have a solid relationship with your clients it won’t matter how many comments your competitors leave on their wall. They’re yours.

What are some other reasons financial advisors should use social networks? I would love to hear your ideas.