May 15, 2013 11:01 am

Engaging socially — online

by Holly Hough, MARKETING CONSULTANT, aabalone[red]

You’ve seen the numbers. Facebook has more than a billion monthly active users. LinkedIn is the world’s largest professional network. Twitter has 500 million total users. YouTube has a billion unique monthly users. And then there’s Tumblr, Instagram…

You’ve seen the people. Eyes completely glued to screens – whether it’s an iPhone, iPad or laptop. And it’s not just teenagers. The American Life Project at Pew Research conducted a study at the end of 2012 of internet users. The report revealed the age, sex, education attainment, race and urbanity of the largest social sites. Not surprising, young adults are the biggest users. But over half of those over 50 years old and a third over 65 are active in the social media world.

This is the way people communicate today. Social media networks were designed to connect people to each other and to organizations, but more than that, they have transformed the way people interact, share and make decisions. Recommendations, “Likes,” posts, and Tweets and reTweets help people form opinions. If your firm benefits by communicating with people, then social media is a concept you can’t ignore.

For many reasons investment managers have been slow to embrace social media. One is this historically closed-door, private, word-of-mouth industry seemed to work just fine without it. Then there’s a belief that the wealthy don’t use new media. Another hesitancy is a lack of understanding of what social media can do for the firm. Oh, don’t forget the fear of the Securities and Exchange Commission.

Rethink. Young adults are growing up; and even some of them already need investment management (think of 17 year old Nick D’Aloisio who reportedly sold his app to Yahoo for $30 million). Seven out of 10 wealthy investors either have changed their relationship with an investment provider or reallocated investments based on something they read on social media, according to Cogent Research. This month the SEC outlined the rules for social media disclosures and the commission appears to be relaxing its stance by recognizing social media sites as legitimate outlets for communication, much like a corporate website. The digital world evens out the playing field; large investment managers don’t look any bigger on a screen than a small boutique. There’s another reason to not wait – it takes time to build a following.

With the right strategy in place, a solid understanding of appropriate usage and someone dedicated to keeping communications up to date, investment management firms can benefit both in terms of client acquisition and retention by engaging “socially” with the online world. After all, research tells us your prospects and clients are already making decisions based on your online presence (or lack there of).