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Social Media in Wealth Management: Reaching clients and prospects on social media.

Published By :

Verdict Financial

Published Date : Jun 2016

Category :

Banking

No. of Pages : 57 Pages

Summary
The majority of investors are now active on social media on a daily basis, and wealth managers should embrace this both on the company-level and on the relationship manager-level. Social media adds value in a number of ways. Companies can benefit from social media in promoting their brand, enhancing thought leadership and investment opportunities, reaching out to a younger target audience, as well as servicing customers. Relationship managers can leverage social media in researching and reaching out to prospective clients, nurturing client relationships, and building their personal brands.

Key Findings
While the majority of consumers are now active on social media on a daily basis, the frequency of social media use decreases with age: 94.2% of investors aged 1824 use social media at least daily, while just 44.1% of those aged 65+ log in daily.

Company policy and the feeling that social media is too public are the most often cited reasons for wealth managers not being active on social media channels.

The most popular activity companies undertake on social media is brand promotion, at 72.6% of respondents, followed by the promotion of new investment opportunities, thought leadership, and services.

Client servicing is not yet among the activities wealth management companies regularly practice via social media. Only 31.7% of firms respond to client queries via social media a very low percentage given the amount of time customers spend on social media.

For relationship managers contacting prospects, the leading use of social media is the opportunity to build their personal brand followed by the opportunities to research and contact prospects.

Synopsis
This report analyzes how wealth management companies and relationship managers can benefit from using social media. The report is based on our proprietary Global Wealth Managers Survey.

Specifically the report:

Analyzes how social media can be useful across the client value chain and what the barriers are to social media use in companies.

Provides context on how common social media usage is across different demographic segments.

Examines how wealth management companies can use social media to promote their brand and promote thought leadership and investment products, and analyzes the most popular platforms for each purpose.

Examines how relationship managers can leverage social media in researching and contacting clients and prospects as well as use it in strengthening client relationships and building their personal brand.

Analyzes the use of social media in client servicing and analyses the most popular platforms for each purpose.

Analyzes how wealth management companies tackle social media compliance issues.

Provides an international overview of the recent regulatory developments on social media

ReasonsToBuy
Review your current social media strategy and benchmark your social media activities against competitors.

Understand how to tailor content and social media strategy to fit each platform and benefit from competitor examples across different platforms and use cases.

Proactively shape social media activities in light of emerging platforms and social media trends.

Broaden the use of social media from mere marketing or brand-building activities.

Table of Contents
EXECUTIVE SUMMARY
Key findings
Critical success factors
DEMONSTRATING THE VALUE OF SOCIAL MEDIA
Social media can add value across the client value chain
Wealth management companies can reap a variety of benefits from social media
Relationship managers benefit from the vast amount of information on social media
SOCIAL MEDIA IN CONTEXT
Social media is now ubiquitous among investors
Young investors are the most prolific users of social media
Asian investors tend to be heavy users of social media
Retail investors are the most prolific users of social media, reflecting their younger composition
Facebook is the leading platform in terms of audience penetration and engagement
While Facebook is the clear leader, Instagram and Snapchat also clock in strong engagement figures among millennials
Of the social networks, Facebook and LinkedIn have the oldest average user bases
Not all relationship managers have realized the social media opportunity
37% of wealth management companies do not engage with HNW clients via social media
Company policy prevents wealth managers from using social media
USING SOCIAL MEDIA FOR MARKETING AND BRAND PROMOTION
Brand promotion and thought leadership are the primary drivers for social media use among wealth management companies
The use of social media as a brand promotion platform will increase
Wealth managers are employing a range of social media tactics for brand promotion
Globally Facebook is the preferred platform for brand promotion
The largest wealth managers dominate the top social media influencer list
Thought leadership efforts should not be limited to a single platform
Start by sharing existing content via different platforms
Thought leadership is mainly distributed through regional platforms and on LinkedIn
Social media allows for targeting the young as the audience is already there
Facebook is the preferred channel for targeting the young
Target a younger audience by picking the right content tailored for the platform
Increase awareness of new investment opportunities on social media
Factoring life events into marketing can make promotions more engaging
Facebook and LinkedIn are the main channels for promoting opportunities and services
SERVICING CLIENTS ON SOCIAL MEDIA
Uptake of social media in client servicing remains modest
Looking forward use is expected to pick up
The preferred channel for responding to client queries varies by region
Clients can be serviced through a variety of platforms
While relationship managers use social media for multiple purposes, it is not utilized enough
Information shared on social media will help in tailoring service offerings
Relationship managers will increasingly extend their personal brands to social media
Relationship managers rely on LinkedIn and regional platforms for client interaction
Researching and contacting prospects: social media offers vast amounts of information
Social media is a key aid in researching prospective clients
Investors also turn to social media when researching
Maintaining client relationships: relationship managers should take advantage of the information on social media
Software solutions can help in picking out relevant information
Company-led social networks could also help relationship managers build on client relationships
Building a personal brand: relationship managers can develop this by providing thoughtful commentaries
LinkedIn is an excellent platform for sharing insights, while Twitter lends itself to shorter market commentary
NAVIGATING SOCIAL MEDIA COMPLIANCE
Most companies have social media compliance teams in place
Only a fraction of wealth managers have no social media compliance guidelines
Collaborating with software providers can offer efficiency gains
Regulators have responded to the growing social media activity by updating their rules
The FCA published its social media guidelines in 2015
FINRA regulates advertisements and online communications in the US
The Hong Kong Monetary Authority has noted the risks of online banking via social media
APPENDIX
Abbreviations and acronyms
Definitions
Emerging affluent
HNW
Mass affluent
Retail market
Methodology
Verdict Financial's 2015 Global Wealth Managers Survey
Verdict Financial's 2015 RBI Survey
Bibliography
Further reading
About Verdict Financial
Disclaimer

List of Figures
Figure 1: Social media can be a valuable tool for building business and creating value
Figure 2: The majority of investors under 65 use social media daily
Figure 3: Across all age segments Asian investors use social media more than the global average
Figure 4: Most investors now log on to social media daily
Figure 5: Over 90% of US adults aged over 35 use Facebook
Figure 6: Snapchat and Instagram trail Facebook in terms of social media engagement among millenials
Figure 7: Nearly half of Snapchat users are under 25
Figure 8: Not all relationship managers have seized the social media opportunity
Figure 9: Wealth managers cite company policy as the main hurdle to taking up social media
Figure 10: The leading use of social media is brand promotion
Figure 11: The use of social media as a brand promotion tool is expected to increase the most
Figure 12: Facebook and LinkedIn are the leading platforms for brand promotion
Figure 13: Deutsche Bank has an impressive Twitter following
Figure 14: CreditEase targets clients through WeChat's Moments
Figure 15: North Americans rely on LinkedIn in when sharing thought leadership
Figure 16: Deutsche Bank tweets market views under #DrStephan
Figure 17: Wealth managers reach out to the younger target audience on Facebook
Figure 18: UBS has a number of accounts on Instagram
Figure 19: JPMorgan ran a Snapchat ad and a geo-filter targeting graduates
Figure 20: Western European wealth management companies prefer LinkedIn for promoting investment opportunities
Figure 21: Nutmeg takes note of the FCA's guidelines when promoting its LISA 333 or Lifetime ISA products
Figure 22: Only a third of companies use social media to respond to client queries
Figure 23: Facebook and LinkedIn are the leading platforms for handling client queries
Figure 24: The "Need help?" tab on Fidelity's Facebook page illustrates to users that the company can be reached through multiple channels
Figure 25: AJ Bell has demoed a live share on Facebook Messenger
Figure 26: Brand building is the leading activity taken by relationship managers in social media
Figure 27: Use of social media in building relationship managers' brands will increase
Figure 28: LinkedIn and regional platforms are the main social media platforms used by wealth managers to target clients
Figure 29: Financial professionals find that LinkedIn helps them to strengthen their profile, enhance their business opportunities, and improve referrals
Figure 30: US millennials find online reviews as important as peer recommendations when selecting a financial advisor
Figure 31: Vouched For allows clients to review their advisors online
Figure 32: LinkedIn ProFinder links customers to professionals
Figure 33: Social Content Recommendation pulls news articles from different sources and matches them with clients' interests
Figure 34: Hearsay Social automatically notifies advisors of their network's life events
Figure 35: Josh Brown, the CEO of Ritholtz Wealth Management, boasts more than 144,000 Twitter followers
Figure 36: In-house compliance teams are the most common social media control
Figure 37: Gremln makes sure that messaging is compliant with set guidelines
Figure 38: The FCA's Finalised Guidance offers clear examples of compliant and non-compliant promotional tweets and other social media promotions

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