Social media is, by definition, social in nature. It connects friends and family in a way that allows communication on the time schedule of the communicator. While a telephone call needs to be picked up to enable communication (voice mail ha almost completely disappeared from the communication stream), a social media post can be shared immediately and can be received when the second party chooses to check their social media pages.
Social media also works as a tool for communications between consumers and corporations, mostly for the purposes of complaint. Twitter has become especially effective in allowing consumers to post complaints about corporate performance in terms of customer relations and satisfaction.
But the appeal of social media as a communication tool between financial advisors and their clients is nearly non-existent. Whether it is the safety of information transmitted or the feeling that social media contact is too indirect, few investors communicate with their advisors through social media.
That fact is not, however, an excuse for advisors and providers to stop providing company updates and informational investment news in social media posts. Such communication, disseminated among an advisor’s complete client list, is very often consumed by clients and used as a way to keep their investment strategies up to date.
Spectrem’s annual study on the appeal of technology in advisor relations details just how limited social media is as a back-and-forth communication tool. Using Technology and Social Media in Financial Decisions also shows that there has been little growth in regard to the use of social media as a way for advisors and their clients to communicate with each other.
For example, only 6 percent of all investors use Facebook to communicate with their financial advisor, and only 6 percent use LinkedIn. The Facebook results are not surprising; Facebook is seen more as a friend-to-friend vehicle than a professional one. But LinkedIn is a website dedicated to business connections, and financial advisors are more likely to have active participation on LinkedIn, which would presumably invite greater communication with clients.
Familiarity with social media plays a role, incidentally. Approximately 25 percent of Millennial investors use social media to communicate with their advisors on the three most popular sites: Facebook, Twitter and LinkedIn.
While the overall use percentages are low, they have grown very slightly from two years ago, when only 2 percent of investors used Facebook to communicate with their advisor.
For comparison’s sake, the Spectrem study shows that 21 percent of all investors text their financial advisor, despite regulatory restrictions on such behavior. Texting prompts a very familiar way of communicating, but has become standard fare for people who were raised on smartphone use. Forty-four percent of Millennials habitually text their advisor, and 21 percent of Gen Xers do as well. Then again, so does 20 percent of Baby Boomers and even 17 percent of advisors from the World War II era.
The ease of texting and the knowledge that everyone operates a smartphone these days may be responsible for the low use of social media as a communication device.
©2020 Spectrem Group
Keywords: social media, communications, investors, advisors, Millennials, Spectrem, texting