News & Views

Archived content. For investment professionals only.

When America sneezes

Financial social media

3 Jun 2013

If ever there was an example of a sneeze in America resulting in flu in the UK, this is it. Only on this occasion nobody has an excuse for not knowing the sneeze has happened.

Closing windows, going into a dark room, donning face masks, placing garlic at the door will not stop this little number affecting you.

Our good friend Lee Werrell from CEI Compliance alerted me to this brilliant piece by Amy McIlwain, a respected and highly influential US financial services industry author and speaker.

I would like to share it with you as I am sure many advisers, after reading this, will be getting the Lemsip ready to deal with that oncoming flu outbreak

“Do you ever wonder how many clients and prospects other financial advisors reel in from social media?

How about if your target audience is even on social media?

These are questions that occupy the minds of many advisors who are on the fence with social media. And with good reason!

Why would you offer time and money to something that you may not get returns out of?

Here are some recent stats that may answer some of your burning questions and catch you by surprise:

As you can tell, there is a ton of opportunity when it comes to social media–even as a financial professional.

As more studies are conducted and social media matures as a marketing medium, the more you will see how effective it is”.

If you are interested in what you can do to improve your social media presence, save time and importantly make money in a very changed, post RDR world, look at our Panacea Social Stream, it is more effective than Lemsip, a hot toddie and a hot water bottle combined.

Email this article Print Share on Twitter Share on LinkedIn Share on Facebook Share on Google+

Comments (7)

This is the new 'King's Clothes' as a poster on another site has appositely put it. We have vested interests trying to persuade us that you just can’t work without social media. They don’t actually work like we do – having to declare their pecuniary interest in the product they are so assiduously recommending.

As far as this piece is concerned it might just have escaped the notice of the author that not only are we not Americans, we actually eschew many of their less prepossessing attitudes and habits. Unfortunately much of their less desirable exports have been adopted. Reality TV, obesity, the penchant for pushing pre puberty children to look like twenty year olds and generally anything that aspires to attract the lowest possible common denominator.
Heaven forbid that we should aspire to higher standards and value literacy, numeracy and a degree of sophistication.

I am not ashamed to count myself as a dinosaur as regards this topic. I have canvassed my clients and done as much research as is relevant for a small firm. Conclusions?

Very few of my clients (less than 5%) use Social media at all.

In my environment it seems that Social Media is for (shall we say) the less serious clients. It seems to be the equivalent to Hello Magazine - and I know that none of my clients read that!

I must therefore conclude that if social media works at all (and I have no reason to believe it doesn’t) then in the main it works for the less well-off and the serious money really doesn’t come via this channel.

I guess if you get your business ‘off the street’; and are prepared to take on clients without solid introduction and validation then perhaps social media – shall we call it S&M – for I see much in common – will suffice.

Harry Katz   04/06/2013   09:28
Harry, do you class yourself as a social media user? I'm looking to understand your definition of social media. You've been explicit about your opinions, but if you could clarify what you class as social media I would appreciate that.

Be brilliant

Bridget Greenwood

Bridget   04/06/2013   13:44
Fascinating stuff.

I must admit that I am surprised at the anti-american comments and NIMBY attitude.

I understand that any one adviser may have a limited number of clients that are competent on technology, especially social media, or may want to use them. These people are generally either unsophisticated or fellow dinosaurs. I say this as recently, Jeff Bullas (jeffbullas.com) noted that older users adoption – On Twitter the 55-64 year age bracket is the fastest growing demographic with 79% growth rate since 2012. The fastest growing demographic on Facebook’s and Google+’s networks are the 45 to 54 year age bracket at 46% and 56% respectively. By the way that is also my age-group.

The reason I mention the older users is that despite their general lack of being grossly overweight and climbing amongst bugs and things in jungles, they are usually considered to be the most affluent and asset rich. They are also referred to as the "silver surfers" - a growing part of the economic landscape. But there will come a time very soon when they pass their wealth onto the younger "less serious" generation who are very much "on the street" and technology savvy.

The old prospecting and sales funnel model has radically changed. I even do presentations on this stuff for people, so I have done the research. The first thing that most people do when a new product or service is mentioned to them, is they do an online search and then perform their own due diligence. They make their own minds up from various information sources, primarily social media, which has surpassed internet searches as the primary source in the last year. They then make their mind up to purchase and look at having their expectations met. If all is well, they blog, tweet, post and generally make known their pleasure. The disaffected will do so more vociferously.

Although it is unlikely to affect small concerns, but anyone seriously using any form of risk management should be aware of the American (sorry, but they got there first) regulators guidance that states "A financial institution that has chosen not to use social media should still be prepared to address the potential for negative comments or complaints that may arise within the many social media platforms described above and provide guidance for employee use of social media."

UK Statistics for 2012 show that
A)over 50% of the population are on Facebook - including many financial advisers.In fact the figure is just under 53% (around 33 Million people)– that’s 62.49% of the entire UK online population. Interestingly, that is fractionally higher than the penetration for the US – so proportionally, more of the population is using Facebook in the UK than in the US; perhaps we need to send them some Kleenex?
cool smiley34 million live Twitter accounts are in the UK, an increase of 8 Million in a year.
C)Demographically 25-34, 35-44 and 45-54 age groups each make up around 20% of those on Twitter
D)LinkedIn passed the 10 million mark during 2012, and is now approaching 11 million. This represents just under 18% of the population, and when you consider that LinkedIn is targeting a (relatively) niche market of professionals, means that LinkedIn really does own the professional social networking space for the UK.
E)79% of LinkedIn users are over 35 including over 82% of the top UK Businesses(but they are obviously not serious either).
F)Google has over $48 Billion in cash - that's half as much as the the UK spends on healthcare each year for the NHS and that money is from online advertising and their Google+ Social media site (which has recently become the 2nd largest in the world).

Even if you ignore the trends and the statistics, your everyday life is partly driven by the internet and social media. Financial advisers and many companies are still way behind with social media use. Its not surprising in many cases as from many websites we have seen, some of them are so basic and crude they would frighten visitors away. Even Banks and providers are sluggish in evolving; many have apps that still need users to communicate via email!

Everyday influencers like the major manufacturers are all over Facebook and Twitter with their "find us on ..." or "tweet your comment with this hashtag".

When talking about Social Media and it's use in Financial Services, what so many advisers retort is "We prefer to work by word of mouth." The trouble is that, as they slip behind on productivity, new business cases, professional relationships, improving their 'customer-journey experience' and increasing their margin, what they don't realise is that so does social media - millions of them!

So yes, as a commercial site that relies on product sales to support it, any such site will have a commercial interest in the promotions it provides to its audience. In this site's work I assume your use of 'assiduously' is referring to the diligence in providing the financial services and adviser audience with pertinent and cutting edge (in this case Social media) tools and information; in that case I think Derek would be guilty as charged.

So I assume Harry, tonight, when closing up for the day, you will summon your trusty steed and wend your way home to a candlelit mansion because you don't trust these new fangled things? Besides, they will never catch on, especially not if they are American.

Regards

Lee Werrell Chartered FCSI FISMM Cert PFS
Compliance Doctor
CEI Compliance Limited
0800 6899689

Lee Werrell   04/06/2013   14:10
Great debate I won't add more statistics but a couple of thoughts. We are in the midst of a second industrial revolution, social media is here to stay and I would never say every business has to use it. However, It is vital every advisory business has considered the impact of social media on them and their clients. Most advisory businesses have built their client base through doing a great job and having their clients recommend them to family and friends. Referrals have been the bedrock of our profession as people value our experience, empathy and expertise. This will continue to be the case but the way in which our clients and future customers communicate has changed and will continue to evolve. We need to be part of this.

We ignore this social and technogical revolution at our peril.

john joe mcginley   05/06/2013   10:26
Hi Harry, I think it’s a real shame you aren’t more active in social media.

Putting aside your xenophobia, you are clearly an articulate and considered writer. I’m sure your clients, and indeed potential clients, would love to hear your thoughts on the topics that matter to them most.

On your broader point of segmenting social media users according to wealth:

Firstly, Hello! Magazine is largely read by women (85%) in the UK. 30% of which fall into the AB socio-economic group and 32% are between 45 and 64 in age.
http://hellomagazinemediapack.com/the-reader/readership-demographics/

Secondly, research firm Scorpio Partnership have produced a series of reports on the adoption of digital media by high net worth individuals and how they prefer to use this medium to engage premium brands as they are generally very busy individuals.
http://www.scorpiopartnership.com/interactive/downloads/page/2/

Don’t knock it until you try it Harry.

Simon Ryan   05/06/2013   14:57
Notwithstanding all the enthusiasm for this topic and the undeniable fact that I am in a minority, it would seem that my view is not so off the mark after all. Recent research seems to not entirely disagree with me:

“Facebook's popularity is slumping in the UK as users become fed up with being bombarded with advertising, a YouGov survey has revealed.

In a report examining social media use among web-savvy Brits, the market research firm found a 9 per cent drop in Facebook usage since April 2012. Exactly one-fifth ditched the social network because they were nervous their personal info would be handed over to third parties.
The report also suggested that advertising on Facebook isn't very successful, with just one in 20 users having clicked on an ad. Ten per cent are adamant that the corporate messages propagated by Zuckerberg's social advertising network aren't relevant to them.
YouGov research director James McCoy said: “This report shows that reaching potential customers through social media is rather different from doing so through traditional media channels”

Oh and for those who think I’m some sort of technophobe please don’t jump to conclusions. I would guess that the quality and amount hardware I have in my office would challenge most. I actually won an award for the use of IT in Financial Services when many of you were still at school.

As far as Xenophobia is concerned I will freely admit that I think Europe is the centre of the Universe. As for being anti-American, that too is off target. I have probably travelled through more of the US than most. In general (and generalisations are what they are) I find the people individually charming and engaging. However as a group…… You only have to look at the Tea Party and the Gun Lobby to realise that they really are on a different planet. It is also amazing to discover that many in (for instance) Georgia don’t know the capital of Texas. This is but one example of the parochialism of ‘ordinary’ Americans.

Harry Katz   05/06/2013   15:22
@ Bridget Greenwood

I do use forums such as these, but I don’t consider them SM.

My definition of SM is what I class the moron sites mainly used on smartphones.
i.e.
Facebook, Twitter and those sorts of things where the general public has access and discusses their toilet habits and other unprepossessing topics.

Harry Katz   06/06/2013   19:04

Login

Not yet registered?

Please complete this form to join our community

Name
Email
Company
Select your role:
Password
Confirm Password

Categories

Panacea Comment

Join the Panacea community

Join the Panacea community for free and recieve news, guides, whitepapers, event information, special offers and more!