More than one third of wealth managers are failing to communicate with high-net-worth (HNW) clients effectively via social media, according to a Verdict Financial report.
The researcher’s report, Social Media in Wealth Management: Reaching clients and prospects on social media, claimed most investors are active on social media daily.
This represents an opportunity for wealth managers to generate business by promoting their brands on different platforms. However, not all wealth managers are taking advantage of this.
The research shows that 78 per cent of consumers with investments log into their social media profiles on a daily basis, yet only 37 per cent of wealth managers use this channel as a way to communicate with HNW clients.
The most common reasons for shunning social media include company policy (51.3 per cent) and because it is “too public” (41.2 per cent).
“When wealth managers are active on social media, it is typically restricted to high-level marketing activity and thought leadership promotion,” said Katri Tuomainen, Verdict Financial analyst for wealth management.
“Indeed, many of the larger players that use social media do so under their general brands rather than via the wealth management division, which can limit the impact and reach of their social media activities in targeting wealth management clients.”
Ms Tuomainen added that beyond promoting their brands, wealth managers can use social media to gain a new client base.
“Besides raising brand awareness and promoting thought leadership, wealth management companies can use social media to target a younger audience, as well as servicing customers,” she said.
“Relationship managers can also individually leverage social media to find and reach out to prospective clients, nurturing client relationships, and building their personal brands.
“Verdict Financial believes that not having a presence on social media gives an inevitable edge to those wealth managers that do have social media embedded within their marketing and communications strategies, while companies with a policy prohibiting social media use stand to lose out in the long run.”