It is not correct to say all people use social media (no matter what your teenagers tell you). It’s not correct to say all people use the same social media.
What is correct to say is that there are trends in social media use based on financial portfolios and investor types. That includes those investors who are defined contribution plan participants, a group who skew younger, making them more likely to visit sites like Facebook, Twitter, YouTube and Instagram.
Spectrem’s Defined Contribution Participant Series study on social media use explains just how plan participants view the use of social media for financial purposes, including matters related directly to their DC plans.
“There are topics about which plan participants want to stay current, and today social media is often considered the best way to do that,’’ said Spectrem president George H. Walper Jr. “Advisors working with DC participants need to consider their social media post habits and topics to speak to these investors and keep them current on those topics that matter most to them.”
To begin, the use of social media sites among DC participants is high: according to Using Social Media and Mobile Technology in Financial Decisions, 76 percent use Facebook, 47 percent use LinkedIn, 39 percent use YouTube and 25 percent use Twitter. It is obvious that usage among younger DC participants is going to be higher than among older participants, but usage of Facebook and Instagram is very high among female participants.
Almost 80 percent of Facebook users check that account daily, and more than 50 percent go to that site more than twice a day. Anyone seeking to reach plan participants would be wise to make information available on that site, especially if the information is time-sensitive.
Although Twitter usage is still well below Facebook, 50 percent of Twitter users check that account daily as well. Twitter is growing in effectiveness as a news source ad more users are following news and investment-related posts on that site more often than in the past.
Almost one-quarter of plan participants view financial videos, preferring educational and current event videos most of all, and 15 percent of plan participants go to Facebook to watch those videos. Twenty-three percent of plan participants go to YouTube to watch financial videos, and that percentage stays consistent through all age groups.
What’s most important for advisors to know about plan participants is that 66 percent of participants who have a primary financial advisor follow their advisor on Facebook, 43 percent do so on LinkedIn and 15 percent do so on Twitter. Any post an advisor places on any of those websites is going to be seen by a healthy portion of the plan participant investor market.
On both LinkedIn and Twitter, those percentages climb among investors in the Generation X age group, who are in their key earning time and probably have the most active interest in their defined contribution plan.
Top Takeaways for Advisors
The information advisors can provide in social media posts include basic information that many plan participants don’t consider, like how to determine when to increase contributions, how the age of the investor can determine the best path to follow in plan participation, and how often to discuss the plan activities and investment with a professional.
One way to reach plan participants on social media is through blogs. More than 20 percent of participants enjoy reading blogs, and investors of all stripes like blogs from voices they recognize, from the famous ones on TV to the familiar ones like their financial advisor. While many advisor blogs will not impact plan participants directly, an occasional blog focused on the needs of participants would be helpful and widely read.
©2017 Spectrem Group