Investor Implications of Modern Era Communication



There was a time, not so very long ago, when communication from friends, family or acquaintances far away could only come via telephone. Sometimes, you even had to wait for a letter to arrive from the postal service.

That is obviously no longer the case. Today, communication can come from so many sources and with such immediacy that some people suffer psychological damage when they don’t get the feedback they want in the time frame they had in mind. As in, immediately.

This turn of events certainly impacts the lives of financial advisors and their relationship with clients. Spectrem research shows that most of today’s investors expect return communication from requests for information the same day the request is made, and often within just a few hours. Thanks to technology, advisors no longer have any down time. They must be quickly responsive at all times.

Spectrem’s quarterly wealth segmentation series study Using Social Media and Mobile Technology in Financial Decisions displays the research on how affluent investors use social media as well as their smartphone or tablets to communicate with their advisor. "Conversations" are no longer limited to voice-to-voice, the written word or even email communiques. Investors want to be able to reach their advisor in a wide variety of manners.

"Some investors are more patient than others, but many of today’s affluent investors want immediate access to information and advice, and this puts advisors in a position to be available for communication at all times," said Spectrem president George H. Walper Jr. "Our research shows that both social media and texting capabilities have altered communication expectations dramatically."

It is true that there are federal guidelines related to communication between investors and advisors when specific investment choices are involved, but as communication becomes easier, regulation becomes more difficult. Despite that, investors are finding ways to communicate with advisors in new ways when the topic is above board.

For instance, outside of traditional modes of communication, texting is the new favored communication tool. According to the Spectrem study, 16 percent of Millionaire investors with a net worth between $1 million and $5 million have had "conversations" with advisors via texting. Of that same group, when asked to place their interest in having texting as a way to communicate with advisors on a 0-to-100 scale, the response was 29.04. That is low, but remains consistent from the previous year’s findings.

However, Millennial Millionaires placed their interest at 61.84, and Gen Xers listed their interest at 47.29. These are people for whom texting is perhaps the No. 1 mode of communication, and it makes sense to them to extend that function to their advisors.  

Millionaire investors were also asked if they want to communicate via Facetime or Skype, and placed their interest at 22.00.

Millionaire investors have not yet extended their communication to social media posts, for that most part. Only 3 percent of investors have communicated with their advisor via Facebook, and only 1 percent have done so via Twitter. Again, however, 37 percent of Millennial Millionaires have reached out to their advisor via Facebook and 21 percent have done so on Twitter. The holdbacks are Baby Boomers and older investors.

Sixty-three percent of Millionaire investors are Facebook friends with their advisor, and that includes 85 percent of Millennials and 76 percent of Gen-Xers. Communication via Facebook may not be happening at a great clip, but it is available to a great many of the clients advisors work with.


Top Takeaways for Advisors

You know that file you have on each of your clients? It must include communication preferences, and should extend to social media possibilities as well as texting and video-chatting.  Thanks to recent events, Twitter is enjoying newfound popularity as a communication device, and your firm should consider extending communication to include that channel, when the communication is appropriate and not in violation of federal guidelines.


You should also take note of an investor’s patience for communication. Spectrem research shows that one of the most frequently cited reasons investors change advisors is poor communication performance. That includes returning requests for information in a timely fashion. Since those requests can now come from different sources, a communication procedural might be necessary with every client.


©2018 Spectrem Group