Social media was a waste of time. That’s what we thought when it started, back in 1997. It was a time-waster, a pursuit for people who didn’t have anything better to do, an excuse not to go outside.
While the “social’’ aspect of social media garners all the media attention due to concerns that children are endangered and adults are endlessly distracted, social media has developed a meaningful business countenance as well. Most major companies have created special departments to handle social media posting, requests and comments in order to gain attention from the many consumers who spend so much of their time perusing Facebook, Twitter and YouTube.
Financial advisors and providers are no different in their need to access the various marketing and communication aspects of social media. Not only are investors interested in hearing from their advisors on social media posts, but articles, blogs and videos posted to social media sites can attract new business.
Spectrem’s new quarterly wealth segmentation series study Using Social Media and Mobile Technology in Financial Decisions displays all of the ways investors use social media in their investment decisions and advisor relationships.
The most telling insights in the report are the number of investors who are on social media and the percentage who link to their advisor on those sites. Millennials, the newest generation of investors who are acquiring assets for investing at a notable clip, are on social media constantly and always looking for material to read, listen to or view.
Among Millennial Millionaires, 73 percent use Facebook and 62 percent use YouTube. Although those two sites use different forms of communication, advisors and firms most understand that articles placed on Facebook and videos placed on YouTube are going to be viewed. It is an opportunity to display your firm’s knowledge on important investment topics.
Almost two-thirds of Millionaires have a primary financial advisor, and of those, 63 percent access their financial advisor’s page on Facebook, while 50 percent are linked to their advisor on LinkedIn and 23 percent follow their advisor on Twitter. These investors did not “friend”, “Follow” or “link’’ to their advisors just for fun; they are looking for stimulus from their advisor which will prompt them to make changes in their investment portfolios with an eye toward improving their bottom line.
There is also a percentage of Millionaire investors who say they would make their decision on a new advisor based on that advisor’s social media presence. Advisors who use social media are seen as modern experts who are likely to be conversant on the newest investment opportunities simply because they are using life’s new tool, social media.
Just as advisors discuss investments in a different way with Baby Boomers than they do with Millennials, advisors must also communicate with investors differently based on their age. It is possible some Baby Boomers still answer the phone, but Millennials never do. If advisors want to get a thought across to Millennials, they need to text it, tweet it and post it on Facebook. Yes, Millennials may see your message three times that way, but unlike print advertising, social media posts cost nothing other than time, and have proven effective.
Yes, there are compliance issues related to social media posts, but they are fairly simple and straightforward. The firms who approach social media with the intent to make it useful are ahead of those firms who have shied away out of fear that they might offend the federal government somehow.