Are You Using Social Media?

For many firms, using social media outlets like Facebook, Twitter, and LinkedIn to communicate with investors raises several questions and concerns: Is it worth it? Will sending out one tweet a day, for a year, increase your bottom line? Will connecting with social media users increase your brand awareness and thus increase sales? These are just some of the things that a CEO will ponder regarding the use of social media. Asset managers worldwide have to take these types of questions seriously, as social media usage increases by those in their target markets.

To answer “Is it worth it?,” first think about your client base and their ages. Social media is not just used by teenagers. According to a “Social network demographics in 2012” report that examined 24 social media platforms, 51% of users are 25 to 44 years old. Looking at Facebook, Twitter and LinkedIn, the average users are 40.5, 37.3, and 44.2 years old, respectively. While many asset managers are trying to target a younger audience, their financial advisors are becoming younger as well. Younger financial advisors are using social media outlets to validate their investments and promote their services, as well as to interact with and educate their investors. So having a strong social media presence can validate your decisions to followers and connections of all ages.

Also, consider the level of trust formed by social media interactions. Personally, I like to know that the advisors I’m trusting with my money are not only knowledgeable about the products they sell, but are also focused on and know the industry as a whole. When I browse social media outlets, articles that reveal a broad and deep understanding of financial topics attract my attention far more than pictures of cats do (sorry, animal lovers!). Social media users are looking for intelligent, informed, and reasoned stories about financial topics, stories which good advisors can share. In today’s market, social media needs to become more of a priority for financial firms and less of a concern. So—are you using social media?