It makes sense for financial providers and advisors to have a presence on LinkedIn, the most business-oriented social media website. But do advisors need to be available to clients on Twitter?
Spectrem’s second quarter wealth segmentation study, Using Social Media and Mobile Technology in Financial Decisions, examined social media usage among affluent investors in three different wealth segments. While Twitter usage trails both Facebook and LinkedIn overall, Twitter usage is growing, and investors want to be able to “follow’’ their financial advisor on that site.
Facebook is the most popular social media website, and usage among affluent investors ranges from 50 percent to 67 percent depending on the wealth segment. LinkedIn membership is between 38 and 42 percent. Twitter, on the other hand, has 16 percent of Mass Affluent (net worth between $100,000 and $1 million), 13 percent of Millionaires (net worth between $1 million and $5 million) and 11 percent of Ultra High Net Worth (net worth between $5 million and $25 million).
Obviously, as with all social media, usage among younger investors is higher, and for investors under the age of 36, 33 percent of investors have Twitter accounts.
But of those investors who are on Twitter, 43 percent utilize it on a daily basis, much more frequently than LinkedIn users. The frequency on Twitter is higher among investors between the ages of 36 and 44, and again for those over the age of 65. Simply put, Twitter users are more engaged and committed to the platform than users of most other social media sites.
Another segment of investors most often found on Twitter are Business Owners, with almost one quarter having Twitter accounts.
While investors vary in terms of who they follow on Twitter (with some interested in athletes or entertainers and others using it to follow political or investment experts), only 5 percent follow their financial advisor.
With its 140-character limit on tweets, Twitter was designed for quick thoughts or messages. Advisors can certainly use that to provide market observations, and update followers on upcoming or current events.
And Twitter is an easy way for investors to engage their financial provider. More than 10 percent of investors who have Twitter accounts use it for conversational purposes rather than just to observe comments from those that they follow.
As many as 10 percent of affluent investors say they would follow their advisor on Twitter if the opportunity presented itself. Among younger investors, almost 25 percent say they would follow their advisor on Twitter. Financial providers, however, have been slow to take them up on that offer, in part due to concerns over compliance issues.