At least two-thirds of Millionaire investors consult with a financial advisor in some capacity, whether it is for a specific life event or to make all of their financial and investment decisions. Is the way HNW investors use financial advisors an indicator of how they use social media? Are you positioning your social media initiatives in an impactful way to ensure you are their resource for financial information presented on social media?
Our wealth segmentation study Using Social Media and Mobile Technology in Financial Decisions examines how Millionaire (with a net worth between $1 million-$5 million, not including primary residence) investors are using online resources and technology. An analysis of our findings by advisor dependency finds varying degrees of social media usage for financial activities.
One-third of Millionaires (34 percent) identify themselves as Event-Driven investors, meaning they make most of their own decisions but use a financial advisor for specific life events, such as retirement planning. Just over one-in-five (22 percent) are Advisor-Assisted; they regularly consult with an advisor, but still primarily make the final financial decisions. Thirteen percent are Advisor-Dependent, and rely on their financial advisors for all of their financial and investment decisions. The remainder are Self-Directed investors, who do not rely on an advisor.
Spectrem Group’s research finds that among Millionaires, Event-Driven investors comprise the largest percentage of their advisor-dependent counterparts who are most likely to use Facebook, Linked In, YouTube and Twitter, as well as Pinterest, Instagram and Snapchat.
Social media is an opportunity to open and maintain lines of communication with clients, our research finds. Of the social networks, Facebook is the one that offers the highest likelihood of success in this area. Millionaires who consult with a financial advisor in some capacity indicate the check their Facebook pages more than other social networks. For example, 37 percent of Advisor-Dependent Millionaires check their Facebook page two-to-five times per day, compared with 22 percent who check Twitter with the same frequency.
Instagram and Snapchat are taking hold as a social media platform most likely to be checked at least once and up to five times a day by Millionaires who consult with an advisor, especially younger ones. LinkedIn, which is more professional and less social in nature, is most likely to be checked less than once per week by roughly 60 percent of Millionaires who consult in some form with an advisor.
Millionaires are also most likely to check YouTube either less than once per week or multiple times during the week, but not daily.
On which social media platforms are wealthy investors who consult with financial advisors most likely to be the most active participants? Our research finds they are more likely to observe, share, comment and communicate with others via Facebook, Snapchat and Twitter. As to the latter, they are presently more likely to follow a financial and/or investment commentator than they are their own financial advisor.
Across the levels of advisor dependency, Millionaire Event-Driven investors comprise the largest percentage of wealthy investors who would be most likely to obtain financial and investment information from—in descending order--Twitter, YouTube, LinkedIn, and Facebook.
Tellingly, wealthy Advisor-Dependent investors are the least likely of advisor-using Millionaires to express concern about the security of their financial information if they are in a social media platform or if it is on an app.
How important is your social media usage to prospective clients? Currently, less than 10 percent of wealthy investors overall would look closely at a prospective financial service advisor or provider’s social media usage to communicate with clients. Analyzed by advisor dependency, Event-Driven advisors comprise the largest percentage of those who take this factor into consideration.
Top Takeaways for Financial Advisors and Providers
· In conversations with clients, be sure to ask about their social media usage. What platforms do they use and how do they use them?
· Be sure to be consistent in posting social media content so your clients get into the habit of checking for new material and information from you.
· Wealthy Twitter users are more likely to follow news, political, and financial commentators than they are their own financial advisor. This is a wasted opportunity. Use Twitter to enhance your visibility and your credentials as an expert.
· In addition to advisor-dependency, age is also a strong factor in the way Millionaire investors use social media. In most cases, social media decreases with age, with the exception of Facebook. Across all age groups, Gen Xers comprise the largest percentage of Millionaires who use the most popular social network.