Social Media for the Very Wealthy
Whatever perceptions you have regarding the limitations of social media and financial well-being, lose them.
Even the wealthiest investors have found purpose in social media, including financial ones, and advisors need to be aware that their best clients are on sites like Facebook and YouTube.
As part of Spectrem’s 2016 examination of investors with a net worth over $25 million, respondents were asked to detail their social media usage. Comparing the research with similar questions asked in 2014, not only is social media use prevalent, it is increasing.
“There was a time when social media was considered just for the kids, and then for adults who wanted to reconnect with high school friends,’’ said Spectrem president George H. Walper Jr. “But when you see how many extremely wealthy investors are using social media sites and searching for financial information on those sites, you realize that social media is a very prominent and effective communication and sales tool.”
The Spectrem study surveyed investors with a net worth greater than $25 million. The study – The Wealthiest Americans – found that 58 percent of the wealthiest investors use Facebook, 45 percent use YouTube and 39 percent use LinkedIn and Twitter. In the case of YouTube and Twitter, the increase over the percentage from the 2014 study are significant - YouTube grew from 24 percent to 45 percent and Twitter grew from 17 percent to 39 percent.
Only 24 percent of the wealthiest investors do not use any of the above-mentioned social media sites. That indicates a wide spectrum of users to consider as either potential clients or current clients who can be engaged with posts, tweets and videos.
The usage among the youngest segment of the wealthiest investors, those under the age of 50, is much higher. More than 80 percent of those investors use Facebook, 68 percent go to YouTube and 63 percent are on Twitter.
Facebook and Twitter are perfect vehicles for interaction with investors, and YouTube provides the opportunity for advisors to present informational videos that wealthy investors are apparently looking for. More than 40 percent of the wealthiest investors would follow a trusted financial advisor on Twitter if that advisor was available to be followed.
The details from the report get even better for advisors who want to be able to reach out to their wealthiest investor clients. Thirty-five percent of investors have communicated with their advisor via Facebook, and 23 percent have done so via Twitter. This is clearly a trend: in 2014, only 11 percent had used Facebook to communicate with an advisor and only 3 percent had tweeted back and forth with their financial professional. Age again is a major factor in that research point, but a majority of the wealthiest investors are under the age of 51, making social media conversation a viable method of attracting or maintaining client relationships.
The social media communication between advisor and investor includes financial information gathering. Sixty percent of the wealthiest investors read blogs on the internet that pertain to financial topics, and 40 percent said they intend to increase their usage of social media sites to find financial information.
The point this research makes is that social media isn’t just social any longer, and that’s true for the wealthiest Americans as much as it is for any other investors.
Top Takeaways for Advisors
Posting to social media sites is not a waste of time, and it is not trolling for new customers. It is the wave of the future for communication, and within the constraints of federal compliance, social media is a viable way to contact the wealthiest investors. Considering the fact that a majority of the wealthiest investors are relatively young, social media may be the preferred method of communication.
*According to Spectrem research, there are currently 29.8 million households with $100,000 - $1 million in net worth (not including primary residence, NIPR). There are 9.1 Millionaire households ($1 million - $5 million net worth, NIPR), 1.21 million Ultra High Net Worth households ($5 million - $25 million net worth, NIPR) and 145,000 households with more than $25 million in net worth, NIPR.
©2016 Spectrem Group