Social media is deeply embedded in the fabric of our society, with many millions of people accessing various social media platforms regularly. One area that has been slow to warm up to social media is the financial industry. There is a great deal of regulation and record-keeping that is involved in the financial sector, so interacting on social media has been something many firms stay away from simply due to the lack of accountability or suitability of audience on a social media platform.
According to recent research from Spectrem Group, 59 percent of wealthy investors currently use Facebook. The second platform utilized the most is YouTube at 34 percent. LinkedIn is third at 31 percent. These percentages vary significantly by age. Over three-quarters of Millennials use Facebook, and nearly two-thirds use Instagram, compared to 34 percent of Gen X, 13 percent of Baby Boomers, and only 4 percent of WWII investors. Over half of Millennials utilize LinkedIn, which is in stark comparison to Baby Boomers and WWII, who only utilize that platform 27 percent and 14 percent respectively.
Variances of social media use is also found by occupation and retirement status. Business Owners are the most likely to use Facebook, while Educators are the least likely to use LinkedIn. Over half of Information Technology sector investors utilize YouTube, which is in contrast to Professionals with just over a third using that platform and the other occupations falling below that in utilization. Retirees are far less likely to use all types of social media than wealthy investors who are still working.
With a greater understanding of what type of investor is on the site, it is now important to look at how, or if, they are using these platforms for financial purposes. Eighty-eight percent of investors do not use Facebook, LinkedIn or Twitter to interact with their financial advisor. This figure significantly changes when looking at Millennials however, who have a quarter interacting with a financial advisor through Facebook Messenger. A quarter of investors with a net worth between $100,000 - $499,999 also use Facebook Messenger to communicate with their financial advisor. Only four percent of all investors use LinkedIn utilize that platform to communicate with their financial advisor and one percent use Twitter for that same purpose.
Investors need to determine if communicating by social media is an important component of a relationship with a financial professional to them. If it is, those investors need to look for an advisor that offers those services. If it is not important, they can continue doing what 80 percent of investors do and communicate via telephone calls with their advisor.