The private banking and wealth management industry must embrace social media as a matter of urgency, argues Graham Aikin.

Editor’s
note: The following article is by Graham Aikin, a former private banker
who now operates his own consultancy, The Bizlinks, focusing on issues
relating to social media and the wealth management sector. His views are
his own but this website is grateful for permission to publish them. As
always, responses are welcome.

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 2012 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. I firmly
believe that in another three years social media will also be viewed by
the majority as another 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
risk being left behind. Imagine trying to run any sort of business
nowadays without having access to email – that is how social media will
be viewed by 2015.

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:

-- There are 1.1 million Google searches every month for “financial advisor”;

-- 47 per cent of UHNW individuals have a Facebook profile;

-- 19 per cent of millionaires are on LinkedIn;

-- 71 per cent of financial professionals have a Facebook profile, 65 per cent are on LinkedIn, 19 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 (about
$100,000);

-- Of investors with at least £250,000 to invest, 75 per cent of them have used LinkedIn for investment research.

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 in the New York area recently attributed a 20 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 YouTube to keep client 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 FSA guidelines on record-keeping.

-- Ultimately, to grow your business, gain client trust, and add significant value for key stakeholders

Almost every other industry is ahead of wealth management in
incorporating social media into their businesses. 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.