Cast your mind back 15 years to a time when many of us thought that email was a passing fad and would quickly go the way of the fax machine as a means of communication. Here we are in 2014 and e-mail is now an integral part of our lives and in many cases has replaced the telephone and face-to-face contact. It is now considered second nature. Despite some naysayers, social media, whether we like it or not, is also now a standard way of communicating. It is therefore imperative that the private banking and wealth management industry embrace social media as a matter of urgency – those firms that don’t do so risk being left behind. Imagine trying to run any sort of business nowadays without having access to email – that is how social media is already viewed by many businesses.

There is a huge amount of research available extolling the benefits of social media, but here are some interesting statistics* that are relevant to our industry:

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  • There are 1.1 million Google searches every month for "financial advisor"
  • More than half of investors over the age of 50 access Facebook regularly
  • 70 per cent of millionaires have profiles on one or more platforms
  • 71 per cent of financial professionals have a Facebook profile, 81 per cent are on LinkedIn, 26 per cent are on Twitter
  • The average age of a LinkedIn user is 41. Ninety-five per cent are university educated, with an average household income of £65,000
  • 67% of financial services firms are now using Twitter and 59% are on Facebook

These figures are only set to increase as the industry begins to understand how effective social media can be, not only in terms of client satisfaction but also upon the impact on your bottom line – an IFA client of ours recently attributed a 15 per cent increase in assets under management to his social media activity.

There are an almost unlimited number of benefits to incorporating social media into your overall marketing/business development strategy. Social media can help you to:

  • Raise brand awareness, as well as preserve the key values associated with your individual firm, by engaging with clients, prospects and fellow professionals online. TIP – use, for example, Twitter, blogs, and Facebook to keep clients informed of firm, market and product news.
  • Expand your professional networks by connecting with centres of influence and key decision-makers. TIP – use your LinkedIn profile and its advanced tools to raise awareness of your client proposition.
  • Acquire new clients and deepen relationships with existing clients. TIP – use Facebook and Twitter to connect with luxury brands that cater to the demographic of your clients and prospects
  • Monitor what the wider community is saying about your brand, products and services. TIP – it is imperative that you use dedicated software designed to monitor what your clients and employees are saying about your brand online; you must also use this software to retain all social media activity for seven years, in accordance with FCA guidelines on record-keeping.
  • Ultimately, to grow your business, gain client trust, and add significant value for key stakeholders

The two most common perceived barriers to entry, compliance and brand damage, should not be a hindrance as both can be controlled and managed with a comprehensive and well-thought out business strategy.

Many private banks and wealth managers perceive social media as just another way of promoting their services. This view needs to change – social media is an incredibly powerful way to inform and educate your clients and prospective clients about subjects such as your brand values, culture, quality and breadth of your expertise, sponsorships and other ‘non-sales’ activities. Social media will clearly never replace your relationship managers and other client-facing staff, but there is an ever increasing expectation that it will form a complement to your traditional ways of communicating with your audience.

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We have a wide range of case studies and success stories which reflect a growing demand from clients to interact with their banker/wealth manager via social media, and an increasing number of our clients are seeing significant outcomes as a direct result of their social media activities, whether that be improved client satisfaction levels or new assets under management.

Graham Aikin, Owner, HNW Social Media Solutions Ltd