Editor’s Note: Clay Shirky noted in his book Here Comes Everybody: The Power of Organizing without Organizations, “Communications tools don’t get socially interesting until they get technologically boring.” For consumers (translated – investors) social media became boring from a technical perspective when smart phones and tablets became mainstream and in many cases total computer replacements. In business we cannot always enjoy the nimble shift quite as easily. However, it does explain why we see massive adoption and engagement on social networks for individuals while 5 years in we are still asking why we should be social in financial services.
The answer is the question. If we are asking why when the numbers show saturation for consumer usage of social – we’re in trouble. Not only now as prospective clients perform due diligence through digital channels – but in the coming 5 years as major segments of wealth transfer rise and heirs and freshly minted affluent, young investors look to engage with us through these channels. How and where you leverage social media and digital channels is not as critical as understanding how to transition your business into the digital era.
1. Your clients are using it: Trends of investors using social media
- 68% of U.S. online adults with an investment account now have social network profiles
- Nearly two in three of mass affluent consumers take action after using social media to discover and consider financial products and services
- Two-thirds of millionaires surveyed said they would like to use electronic media with their advisors.
- However, there is a huge gap between investors who interact with their advisors on social media (4%) and investors who would interact with their advisor on social media (52%).
- Nearly 70% of wealthy investors have reallocated investments, or began altering or already altered relationships with investment providers based on content found through social media.
2. Women are using it:
- Women are leading men in terms of social media adoption in the United States: 74% of women in North American have a social media account vs 70% for men.
- Women spend more time on social media networks than men.
- Compared to men, women’s behavior on social media is more relationship- driven: They spend more time on social networks building relationships and making new friends.
- Women are referral machines – who enjoy giving feedback and making recommendations on social networks.
For more on the financial power of women, read here.
3. Your peers are using it for business:
- Seven in ten financial advisors are already using social networks for business purposes and this adoption rate will only continue to grow.
- In 2013, 69% of financial professionals have formal social media policies at their firm, a significant increase from 2011.
- 60% of financial advisors have daily contact with clients through social media, with 54% citing that they found or converted clients using social media channels.
- 15.4% of advisors have gained new clients from using social media
- At the 2013 Social Media Summit hosted by Jennifer Openshaw, we asked top financial advisors: “How long were you using social media before you could see a discernible difference in your business?” The answer is between 6 – 12 months.
So don’t be left behind…
4. The next generation is using it:
- Three in four teens visit social media sites on a daily basis. Young people still use search engines to get information from websites, but more and more are now asking and searching about products and services through social media.
- Young millionaires (ages 44 and under) are three times more likely than older millionaires to select financial advisors from their online content. They also show four times more interest in reading posts or blogs from their advisor.
- 38% of young millionaires compared to 4% of millionaires of all ages state they are more inclined to rely on financial product and service information advertised or discussed on social media platforms.
- Fact: How financial advisors use social media to communicate with clients will, indeed, impact young millionaires’ decisions about hiring a new financial advisor.
5. Your big targets are using it! (senior corporate executives & high net worth investors)
- Only 13% of directors and senior executives don’t have at least one social media account and 63% of them use social media for business purpose.
- Over 90% of high net worth investors participate in social media. These investors tend to do research online before making their investment decisions.