Just as the Internet and e-mail have become ubiquitous over the past 15 years, social media will be the same, only faster. It will weave its way into the fabric of the asset and wealth management business and influence heavily how firms communicate with advisors and end-investors alike. Why? These investors will demand it.
At this point though, formal social media strategies are few and far between in the industry. If you are one of a handful of firms that has headcount and a budget for social media, you are considered a pioneer. You’ve followed a path similar to the one outlined by Singapore based PR firm GetIt Comms in the attached graphic.
For managers seeking to make small but steady inroads into this market, we think the best place to start is with millennial investors, also know as Generation Y. This is a group that most industry firms overlook in their marketing efforts, which tend to over emphasize the baby boomers. Since many firms lack a Generation Y marketing strategy, it makes senses to roll any new campaign into a broader new social media strategy. Why does this demographic deserve this attention? Well, the numbers speak for themselves.
These millennial investors will inherit up to an estimated $40 trillion from their boomer parents, according to Boston College, and will eventually comprise approximately 29% of the U.S. population. Known as “digital natives,” this generation is expected to communicate more via social networking sites than e-mail in the near future – many millennial investors do so now.
Remember that you don’t place a phone call to this generation if you want to connect, you text. Google is their main source of answers to their questions and everything is fair game to be posted on Facebook or YouTube.
When crafting social media content for Generation Y, asset and wealth managers should consider the millennial investor’s preferences by being straightforward, transparent and consistent with their communications. Managers with interactive websites that assist the advisor and investor in understanding their investment process have an advantage. Firms also need to focus on delivering their message across the spectrum of various social networking sites. Remember these advisors and clients now go anywhere and everywhere to gather the information they need to make an informed investment decision.
But the importance of a social media strategy goes beyond millennial investors. The baby boomers are increasingly joining the ranks of Facebook users. Even grandparents are becoming members of Skype, which is very social media friendly. Additionally, changing market forces make it more important for asset and wealth managers to consider formal social media strategies. These factors include:
- A decline in the trust of financial services firms. The viral nature of social media increases the speed in which a brand can be subject to public criticism. In a world where the words “ethical” and “trustworthy” are the attributes in managers that advisors ist as most important, it makes sense to have a proactive approach to communicating the firm’s message on social media pages. All managers should practice transparency and candor in all of their communications on these sites.
- Social media will bring business to managers. Social Networking provides advisors and their clients the ability to instantly tap into large sources of data and to hear direct recommendations about investment products from their peers. In this environment, managers need to be assertive in identifying their value proposition to investors.
- Direct communication through social networking sites. The ability to engage colleagues, peers and complete strangers is becoming easier more accepted. It will allow advisors and their customers to maintain and engage with a much larger peer group in the future. Firms should be developing strategies on how to communicate directly to these clients and prospects through social media sites.
Overall, managers that grasp the nuances of this newly emerging target audience and design communication strategies that include their preferences will capture their share of this market. Those that don’t will compete for a shrinking piece of the pie as the more competitive players fine tune their strategies and take a larger piece of the investable dollar pool.
