The use of social media amongst Wealth clients is also increasing. In the US, 70 percent of millionaires use social media with 46 percent using Facebook in 2011, nearly doubling from 26 percent in 2010. In spite of this, 60 percent of Wealth Management firms have no presence or only occasionally update their activities on the major social networks such as Linkedin, Facebook or Twitter. Wealth Management firms are missing a significant opportunity to engage with these clients and prospects.
The Wealth Management industry has always differentiated itself through providing a personal, bespoke service to its clients. There may be a level of scepticism that social media can be used to build the in depth, close client contact that has always been at the heart of Private Banking.
Some Wealth Managers have taken up the challenge. Morgan Stanley is piloting the use of Twitter for its advisors. Deutsche Bank is active on Facebook, YouTube and Twitter. On Facebook , the bank has a ‘fanbase’ of 25,000. Credit Agricole and BNP Paribas both have strong presences on YouTube as well as mobile applications.
The more ‘traditional’ social media channels described above are still in some respects, a one way channel where information is disseminated out to clients. With a ‘fanbase’ of 25,000, Deutsche Bank cannot reply to each comment individually, nor does it actively target the Wealth Management segment as its online strategy is for the bank as a whole. To build a strong personal relationship with their clients, the industry should explore the more interactive aspects of social media and aim to build a community.
In the world of Wealth Management, this is manifesting itself in private investor networks that allow members to source their own wealth generation ideas. In the UK, Pi Capital, which allows its members to source private equity opportunities, also organizes events and gives its members access to exclusive travel and lifestyle products and services.
Coutts has launched an online learning portal exclusively for its clients. Clients are able to engage in discussions and interactive forums with experts and connect with one another globally. Also, eToro, an electronic and software provider has set up a financial trading social network which is purported to be the world’s largest social forex trading and investment network.
Social media is not going away. With clients increasingly demanding a 24/7 global service without sacrificing the deep relationship and understanding that a private banker can provide, social media may be the only way that these demands can be met.
Jeannie Gu, Advisor, KPMG in the UK