Social media and wealth management
Private banking and wealth management is often perceived to be a closed and exclusive world. The model is based on close personal and trusted relationships between advisers and their clients – all shrouded in a code of confidentiality. But in the last few years technology, particularly in the form of social and digital media, has begun to make waves.
This trend is also evident in the world of the private clients themselves, those high net worth individuals (HNWIs) with financial assets of $1 million. Research by Scorpio Partnership, a wealth advisory firm, found that HNWIs spend around 5.5 hours a week using digital media to manage their financial matters. According to Cisco a third of investors under 55 use a computer to check or manage their investments on a daily basis, 28 % use a smart phone to look at portfolios and 24% use a tablet to do the same.
In the UK, the wealth management industry has been sceptical, but several well-known brands have adopted a progressive approach. Traditional names like Charles Stanley and Coutts have embraced the use of social media to engage and connect with their clients. The biggest use of social media has been in the retention and acquisition of clients.
In recent research undertaken by Citigate Dewe Rogerson and PAM Insight (a leading wealth publisher www.paminsight.com) 77% of wealth managers and advisors claimed that digital media helped attract new clients. Over half (59%) think digital media crucially helps build a presence within the industry and one in three currently use digital channels to boost traffic to their website. The majority of the people we spoke to (85%) recognised the benefits of digital media, though only 54% said their company is currently doing enough in the space.
It is important to stress that social media is not seen as a direct replacement to the traditional model. Personal relationships and a bespoke service are still the main ingredients for success, but social media used in the right way can add value and increase the client experience. Please get in touch to find out more about our survey and how social media is shaking up the wealth management industry.