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Hey Wealth Manager, Your Holistic Narrative Belongs to Social Media Now

Survey findings show investments in social media to surpass other marketing expenditures in 2021.

Just as the Black Plague led to the Renaissance, past pandemics have always opened new doors to adaptation and innovation. Now, wealth managers too are applying their lessons learned from COVID-19 to accelerating their digital transformation at a surprisingly fast pace.

Among their technology investments for 2021, financial advisors cited social media marketing as their top choice by far, followed by webinars and video content, according to the Broadridge report Arming Advisors for Success in a Post-2020 World. Based on extensive data drawn from advisor interviews conducted in 2019 and 2020, the study provides a unique close-up of wealth management trends before COVID-19 struck and afterward. From 2019 to 2020, advisor investment in social media marketing climbed 22%. And, when a marketing plan was wrapped around those social media efforts, advisors reported a 60% increase in their ability to convert a single social media lead to new client status.

When COVID-19 introduced the world to social distancing last year, it also managed to push the financial marketplace half a decade into the digital future. As McKinsey research pointed out, “We have vaulted five years forward in digital adoption in a matter of around eight weeks.” Three factors underpin the surging wealth management investment in social media: soaring demand for professional advice; older cohorts who are warming up to social media; and the fact that any platform usage creates more engagement—and more usage.

COVID-19 Propelled Clients to Advisors

Responding to growing wariness about the market’s volatility, one in four Americans sought out an advisor for the first time ever in 2020. As advisors confronted their client’s daily disruptions, many rose to the occasion with more frequent meetings at a distance through a variety of digital tools from Zoom calls to texting and social media. Advisors saw their holistic business objectives telescope as their social media interactions with clients started to cover planning subjects beyond investments to other needs. As clients sought out wellness tips through social media for other aspects of their lives like personal health and remote learning for their children, they naturally encountered pandemic planning themes that touched on personal finances. This provided a convenient venue for interactions between advisors and clients where they already were—online.

While advisors in the Broadridge study said they still preferred LinkedIn and Facebook for converting leads, their conversions from Instagram and Twitter also managed to double between 2019 and 2020. Social media proved to be an exceptionally cost-effective way to promote wealth management as a critical element to “wellness,” in effect pulling together the different elements of living-through-COVID into a holistic and coherent narrative for the client.

Not Just for Millennials

According to a Broadridge report that looked at investor behaviors, Personalizing Advice from a Digital Distance, an overwhelming majority of Gen Z (86%) and millennials (87%) said they are comfortable having an advisor follow them on social media to get to know them in order to offer a more customized experience.

While 60% of Gen X and 20% of baby boomers said they were comfortable with advisors as followers, we expect that number to go up as the social media networks of these older cohorts expand with time.

The way younger people use social media for crowdsourcing research can be instructive: If 25 of any particular network of friends recommends that something is a good idea the chances are good that the 26th person in the network will click on that link—and look at it—as well. We expect older cohorts to follow a similar pattern as they grow more familiar with their platform network.

Social Media’s Impact Amplifies With Usage

It’s easy to forget how recent the explosion in social media usage really is. When Pew Research first asked U.S. adults if they used social media in 2005, just 5% said “yes.” Fourteen years later, that number grew to 72%. A new term, relationshipping, defined as “deriving human value from our digital connections” has been added to the digital lexicon.

To be where their customers are, wealth managers know they must meet them on each client’s preferred platform. Such social media relationshipping is now table stakes for their business success. From sharing family photos, it’s a short step to seeking out wellness information, news items and financial information—providing wealth managers with access to prospects where they already are.

Social media is also part of the advisor’s evolution toward offering “bionic advice.” With greater knowledge of how to apply data analytics to their business building efforts, advisors can let the power of data drive prospecting activity too. Receiving notifications on their mobile device about a client’s social media posts or life events, the data-enabled advisor can respond with a customized message at the touch of a button.

COVID-19 made social media usage a part of everyone’s daily life. More-practiced advisor-users will enhance their posts with short, engaging videos, which have been shown to outperform all other forms of content. Targeted ads complement other digital activities by consistently driving traffic back to the advisor’s website. Such digital ads have been shown to boost the likelihood of prospect-to-client conversion by 70%.

With the growing number of COVID vaccinations taking place, post-pandemic America is finally coming into view. More than part of our lifestyle, social media is now part of our lives. Taking social media from simple communications and collaborations to setting a standard for growing and managing their business will be hugely beneficial to wealth managers in 2021. After all, having the opportunity to conduct one-to-one relationships in a single place where 72% of their potential customers already are is nothing to overlook for those wealth managers with a good story to tell.

Traci Mabrey is head of Wealth Solutions at Broadridge Financial Solutions.

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