There are industries, such as retail and travel, which endorse and implement significant social media campaigns and services. Then there are other industries which get little attention from consumers and limit their social media exposure.
Then there is the financial services industry, which is still growing its social media output amid continuing battles over regulations related to information dissemination.
Just as there are industries with different social media programs, there are investors from different occupational backgrounds who have different uses for social media related to their investing plans. Those differences are examined and detailed in Spectrem’s study Using Social Media and Mobile Technology in Financial Decisions, which surveyed affluent investors from different occupations about their use of websites like Facebook and Twitter as well as their use of smartphones and tablets for financial purposes.
Many of the findings in the study make sense. Business Owners, who often make extensive use of social media for their business purposes, are going to have different uses for social media from an investment standpoint than Managers, who may not be as involved in social media from their own company standpoint.
The value to advisors is in understanding just how an investor’s occupation can influence their social media usage and use it for their financial decision-making.
For instance, according to the Spectrem study (and common sense), Millionaire Senior Corporate Executives and Business Owners who have a net worth between $1 million and $5 million are the most likely to use the social media site LinkedIn, which has as its main purpose connecting people for business-related functions. What’s revealing from the research is that even among those two occupations, LinkedIn usage is below 50 percent (45 percent for Business Owners and 43 percent for Senior Corporate Executives).
But Millionaire Business Owners report the highest usage of YouTube, and are the most active users of Facebook. This makes sense, because many businesses today use social media extensively to connect with consumers, and these Business Owners may be more comfortable with social media functions.
(A majority of Senior Corporate Executives who do not use social media complain that it is a waste of time, and 60 percent worry about the privacy of their personal information. But 27 percent also say there are too many programs in social media to keep track of.)
Millionaire Managers have the lowest percentage of users of most social media sites, and 31 percent of Professionals (doctors, lawyers, accountants) do not use social media at all. What’s interesting about the information about Professionals is that those investors are the ones most likely to examine the social media use by a financial advisor to determine if they want to start a new relationship for investing advice.
Many of these Millionaires use social media to watch videos on financial topics, including 48 percent of Business Owners, who prefer videos of financial commentators and current events.
While financial advisors and providers are encouraged to develop social media strategies for getting approved messages out to consumers about investment news or product offerings, the site that could provide the greatest feedback is Twitter, which has developed a reputation as the social media site for communication (even more than Facebook). Retail and service companies have developed staffing to respond immediately to complaints they receive on Twitter, and financial advisors can do the same.
Thirteen percent of Millionaire Business Owners currently follow their advisor on Twitter, but more revealing is that 17 percent of Senior Corporate Executives would follow their advisor on Twitter if they had the opportunity to do so. Nine percent of Professionals would also like to be able to do that.
The study shows that Twitter is also the social media site most likely to be used for obtaining financial and investment information, and Millionaire Professionals show the greatest interest in doing so.
Top Takeaways for Advisors
The Spectrem study shows trends among investors based on occupation, not certainties. However, advisors can determine how an investor’s occupation affects his or her attitude toward social media usage. Which investors use social media to do research on their own, and which ones use social media to discuss investment and financial options with their advisor? The occupation of the investor can go a long way in understanding how they feel toward social media usage for financial purposes.
©2017 Spectrem Group