Here’s something you might not know: social media usage among UK millionaires is now commonplace.
According to Ledbury Research, which studies the habits and demographics of the wealthy in the UK, at least 75% of high net worth individuals used social media regularly in 2014.
So what does this mean for retail asset management?
We already know that there is a seismic shift occurring in the way funds are distributed. Online platforms in the high net worth and mass retail markets are the headline change. And this is increasing the importance of strong branding and direct customer relationships for asset managers of all shapes and sizes.
Add to all this the meteoric rise of social media among the well-heeled and asset managers really ought to start paying attention. Because it amplifies word-of-mouth recommendations and nuggets of advice, social media can have an extraordinarily swift impact on brand perceptions and purchasing decisions.
So what exactly can social media do for asset managers?
It is crucial to grasp that social media networks are not in themselves a new distribution and sales channel. Instead, they should be seen as an opportunity to develop and strengthen branding, reputation and customer relationships. They also give asset managers the chance to gather feedback direct from individual investors and advisers in real time on anything from customer service or email communications to technology or fund performance.
In short, social media offers asset managers the chance to build direct relationships with retail investors. In the old days, this relationship was owned by intermediaries.
So how can asset managers start social media-ing (today)?
There are, obviously, degrees of commitment – so I’ve labelled them ‘gold’, ‘silver’ and ‘bronze’, which can be thought of as ‘nice to have’, ‘probably should think about doing’ and ‘this ought to be done immediately’. Let’s start with the latter.
BRONZE – reputation and brand monitoring
This is simply a matter of good governance and risk management and is largely reactive. It means being aware of and understanding every contact your business has with social media, from the tweets of your own fund managers to the chatter on the Motley Fool bulletin boards – and everything in between. This gives you the opportunity to address problems, like negative or inaccurate commentary, where they occur. You should do this today.
SILVER – analytics and data analysis
This is about analysing the information you were looking at in the ‘bronze’ stage to draw broad but useful conclusions about how your business and its products and services are seen out there in the real world. It allows you to understand your customers needs and gives you the opportunity to improve – not necessarily in fund performance (if only it were that easy!) but in customer service and communications.
GOLD – talk!
The third, most proactive layer requires asset managers to engage with investors and their advisers. In practice, this could include using social media to build relationships with individuals and advisers, sharing an array of well-written, beautifully-designed or cleverly-filmed content – and jumping into in forums for discussion and debate. It means responding directly to users voicing particularly strong or influential opinions about the brand. It could mean offering social media users ‘pro’ services or seeking out users’ views.
Social media is not a silver bullet, but asset managers ignore it at their peril. Suffice to say, MRM can guide you gently through any and all of the three stages above – so don’t hesitate to email me if you’d like a free consultation.