2014 individual investors social media behavior report
TRANSCRIPT
2014
Individual Investors Social Media Behavior Report
We all know about the increasing number of individual investors using social media to engage with their advisors: more than a one-third[1] of financial advisors now use social media for business purposes.
But do you know what kind of social media presence and behaviors are actually important to investors? Simply creating an online profile is not enough to generate value. In this study, we survey individual investors to learn what they want to view on their advisors’ social media feeds and what kind of social media behaviors will affect investors’ decisions to choose advisors.
We hope this study will provide clear guidelines to financial advisors who are on social media but are still not clear about how to use and leverage it.
[1] Source: FTI Consulting: Financial Advisors’ Use of Social Media Moves from Early Adoption to Mainstream!!
• Nearly half of investors want to connect with their advisors on social media but cannot find them or conclude their advisors are not on social media
• Investors age 44 or younger are more likely to connect with their advisors on social media compared to those over 45
• Emerging Affluent investors[2] use social media more than mainstream and high net worth investors
• Investors who connect with their advisors on social media tend to be satisfied with the level of access to their advisors
• Female investors are 11.5% more likely to connect with their advisors on social media than male investors
• Investors do not care about their advisors’ personal life details on social media
• The MOST important social media interaction with advisors, according to investors, is sharing trending investments or personal finance news
• An advisor’s number of social media followers is the LEAST important feature for investors when choosing advisors through social media
• An advisor’s availability to answer questions is the MOST important feature for investors when choosing advisors through social media
KEY FINDINGS
[2] Emerging Affluent investors: Total value of investment between $100,000 - $999,999!!!
87% of investors surveyed are using social media
Among investors who are not using social media, 46% of them would be more likely to if they could communicate in real-time with a financial advisor. Meanwhile, 54% of them would not or are not sure.
Q: Are you using social media?
Note: Social media platforms are part of our survey delivery channels, so this may generate some bias
Yes 87%
No 13%
Only 25.5% of investors connect with their advisors through social media
Q: Do you connect with your advisor on social media in any form?
Note: All investors here are using social media and have advisors
Yes,%25.50%
No,%74.50%
Nearly half of investors want to connect with their advisors on social media but cannot find them or figure they are not on social media
Q: Why do you NOT connect with your advisor(s) on social media?
49%
However, 38% of investors don’t find it meaningful or relevant to connect with advisors on social media.
Note: All investors here are using social media and have advisors
Others 13%
I,don’t,find,it,relevant,or,meaningful
38%
My,advisor,is,not,using,
social,media 22%
I,cannot,find,my,advisor,on,social,media 27%
Other reasons Q: Why do you NOT connect with your advisor(s) on social media?
(45-‐54 female)
I feel contact through email or phone is safer
Don't use social media for my invesCng
(55-‐64 female )
I don’t use social media for money or business decision
(55-‐64 male )
He hasn't reached out to me and it hasn't occurred to me to reach out to him on social media
(65-‐older female )
I let my advisor manage with a long term focus -‐ I email when need to but otherwise don't connect.
(45-‐54 female )
I call him directly
(35-‐44 male ) Note: All investors here are using social media and have advisors
80.91%
93.48%
19%
6.52%
Yes No
Female investors use social media more than male investors
Q: Are you using social media?
Female investors are more likely than men to connect with their advisors on social media – 11.5% more ac;ve
Q: Do you connect with your advisor on social media in any form?
YES
32.3% 20.8%
Note: All investors here are using social media and have advisors
Very%Dissa*sfied
Dissa*sfied Somewhat%Dissa*sfied
Somewhat%Sa*sfied
Sa*sfied Very%Sa*sfied
Investors connec+ng with advisors on social media tend to be
sa;sfied with the level of access to their advisors through that pla8orms (63.6%)
Q: Are you satisfied with the level of access to your advisor through social media?
MEAN
0%
18.2% 18.2%22.7%
27.3%
13.6%
under&25 25*34 34*44 45*54 55*65 65&or&older
Yes No
Investors age 44 or younger are more likely to connect with their advisors on social media compared to those over 45
Millennial investors (born after 1980 ) have the highest social media usage rate (96.6%)
%
Q: Do you connect with your advisor on social media in any form?
Note: All investors here are using social media and have advisors
0%50% 30.8% 40% 4.5% 25%
Mainstream Emerging-Affluent High-Net4Worth
Yes No
High%Net)Worth
Emerging%Affluent
Mainstream
Emerging affluent investors are more likely to connect with their advisors on social media compared to others
Q: Do you connect with your advisor on social media in any form?
20% 28% 26%Mainstream Less than $100,000Emerging Affluent $100,000 - $999,999
High Net-Worth More than $999,999
Definition Total value of investment
Emerging Affluent also have the highest social media usage ratesQ: Are you using social media?
Note: All investors here are using social media and have advisors
Yes
88.60%
90.22%
77.78%
Investors don’t care about their advisor’s personal life details on social media
78% of investors who connect with their advisors on social media stated that their advisors’ personal life detail on social media are not at all important.
We asked this question because sometimes advisors cannot distinguish between having personal interactions and sharing their personal life on social media. Examples of personal interactions include sharing opinions, showing emotion and personality, and/or taking interest in another person’s well-being. However, this do not mean one needs to share details of their personal life, such as travel photos and new baby. In truth, investors don’t care about those things at all.
Therefore, we suggest you separate your personal social accounts from your business accounts. Tips here.
Q. How would you like to communicate with your advisor on social media? Rate their importance
Note: Results from above are all from investors who are connected with their advisors on social media.
78%
Not$at$all$important
Slightly$important
Moderately$important
Very$important Extremely$important
Highlights$from$his/her$personal$life
The most important interacCons that maQer to investors on social media
Note: Results from above are all from investors who are connected with their advisors on social media.
!"!!!!!!!!!!!!!!!
Trending!investment!or!personal!financial!news/topics!advisor!has!shared!!
Educa8onal!ar8cles!&!research!advisor!has!shared!!
Instant!access!to!research,!white!papers,!videos!he/she!recommends!
Updates!on!my!investments!
Ar8cles!and!research!the!advisor!has!wri)en!
Types!of!investments!used!for!current!clients!
RealA8me!answers!to!my!ques8ons!
A!private!“room”!online!to!discuss!topics!with!other!clients!or!peers!
Types!of!investments!he/she!is!considering!or!monitoring!
Note: detail in following pages !
1.--!2.--!3.--!
Rank#
4.--!5.--!6.--!7.--!8.--!9.--!
Other items investors told Finect that they do not want to view on their advisor’s social media timeline include:
• “Promotion/sale pitch” • “Personal discussion /chats/personal crap”
Note: Some investors stated that personal info on an advisor’s Facebook profiles is acceptable but not on his/her professional social media accounts
The least important interacCons with advisors on social media
Highlights from his/her personal life. Example: travel photos
Share Interes>ng topics not related to finance. Ex: amusing YouTube videosOnline events with my advisor and other clients
Business informa>on such as fee structure, offices, special exper>se
Note: Results from above are all from investors who are connected with their advisors on social media.
Note: detail in following pages
Rank
Point: Not at all important = -‐2Slightly important = -‐1Moderately important = 0Very important = 1Extremely important = 2
Q: How would you like to communicate with your advisor on social media? Rate their importance
Note: Results from above are all from investors who are connected with their advisors on social media.
Point
Statistical significance according to one-way ANOVA block design
Statistical significance according to one-way ANOVA block design
!35$ !30$ !25$ !20$ !15$ !10$ !5$ 0$ 5$ 10$ 15$ 20$
Highlights(from(his/her(personal(life.(Example:(travel(photos
Interes9ng(topics(not(related(to(finance.(Example:(Sharing(amusing(YouTube(videos
Online(events(with(my(advisor(and(other(clients
Business(informa9on(such(as(fee(structure,(offices,(special(exper9se
Types(of(investments(he(is(considering(or(monitoring
A(private(“room”(online(to(discuss(topics(with(other(clients(or(peers
RealL9me(answers(to(my(ques9ons
Types(of(investments(used(for(current(clients
Ar9cles(and(research(the(advisor(has(wriNen
Updates(on(my(investments
Instant(access(to(research,(white(papers,(videos(he/she(recommends
Educa9onal(ar9cles(and(research(the(advisor(has(shared(with(others
Trending(investment(or(personal(financial(news/topics
TOP 5 social media features investors prefer when choosing advisors
The advisor’s availability to answer quesCons1.
QsA
2. The quality of financial resources advisors shares online
The level of knowledge in the advisor’s arCcles/blogs/posts3.
The tone/manner in which they engage
4. The advisor’s online profile informaCon such as professional licenses, educaCon and experience
5.
Note: detail in following pages
Least important social media features when choosing an advisor
The number of advisor’s followers
How fast advisor responds/replies via social media
The frequency of advisor’s own ar>cles/blogs/posts
Note: While these features are the least important to investors, one should not conclude investors place no importance on them.
“Quality > Quan;ty.”Note: detail in following pages
Q: How important are the following social media features when choosing an advisor?
Point: Not at all important = -‐2Slightly important = -‐1Moderately important = 0Very important = 1Extremely important = 2
Point
Statistical significance according to one-way ANOVA block design
!150% !100% !50% 0% 50% 100% 150%
The$number$of$his/her$followers
The$frequency$of$his/her$own$ar6cles/blogs/posts
How$fast$they$respond/reply$via$social$media
The$advisor’s$online$profile$informa6on$such$as$professional$licenses,$educa6on$and$experience
The$tone/manner$in$which$they$engage
The$level$of$knowledge$in$the$advisor’s$ar6cles/blogs/posts
The$quality$of$financial$resources$he/she$shares$online
The$advisor’s$availability$to$answer$ques6ons
1. Investment performance: • “I would like to have access to all the
performance data of the accounts they control, up to date and complete.” (35-44 male)
• “The most important thing is for the advisor to disclose his/her own portfolio results and/or credit score (FICO).” (35-44 male)
• “Proof! Ability of their picks to outperform the market. Individuals are better than an advisor can outperform the market - net fees. So just show us.” (25-34 male)
• “Validating their performance and client results.” (25-34 male)
• “I'd like to see a posting of the ROI performance of their advice on a rolling quarterly basis. They could create a model investment program and make it public. Talk about transparency and believability! Better yet, post their personal portfolio of investments showing the return.” (65 or older male)
• “Track record.” (45-54 male)
• “Previous financial acumen w/ clients.” (45-54 male)
Addi>onal behavior or feature that affect investor’s decision when choosing an advisor (both online & offline)
2. Recommendation: • “I prefer to be recommended by someone I trust to
an adviser.” (25-34 male)
• “If others are forwarding or liking their social media posts.” (45-54 female)
• “Recommendation from friend or colleague.” (35-44 male)
• “Prior relationship with someone I trust.” (65 or older female)
• “Endorsements from others.” (35-44 male)
• “Offline reputation - I'd need a referral or recommendation from a person I know in real life.” (35-44 male)
Note: Testimonial and endorsement on social media might violate compliance regulations
3. Customer experience:
• “Excellent Customer Experience.” (35-44 female)
• “Patience, all due diligence on them is very important.” (45-54 female)
4. Reputation:
• “Respect / following by other industry authorities (Warren Buffet types, VCs, etc.).” (45-54 male)
• “Who follows him or her on social media.” (25- 34
male) • “Appearance. I would choose someone who looks
successful, up to date on trends, and attractive over someone who is not.” (25-35 female)
• “Online reviews.” (25- 34 male)
• “I want someone who shares beyond the obvious, and does not always follow the herd.” (45-54 male)
Addi>onal behavior or feature that affect investor’s decision when choosing an advisor (both online & offline)
5. Services: • “Fee disclosure on products.” (35-44 male) 6. Content that shows knowledge level: • “Other subjects that he writes/blogs/shares.” (35-44 female) • “Relevant and substantive content.” (55-64 male)
7. Credibility: • “FINRA status.” (55-64 female)• “Years of experience.” (25-34 male)• “Credentials and validation.” (45-54 male)• “Education credentials.” (25-34 female)• “Higher Education.” (45-54 male)• “How is the advisor authenticated as an advisor?
Identity theft risk is kind of high there.” (35-44 female)
8. Other communication approaches: • “Moderate availability to use Face Time and/or
Skype to interact during financial meetings to target goals and discuss strategy and structure.”
(25-34 male)
• “Sharing relevant information - e.g. info and advice that goes into further detail on your investments, often nice if shared in video format because it's easier to digest.” (35-44 female)
9. Privacy: • “Privacy is key so prefer not to have too much made
public by my advisor.” (45-54 female)
• “Whether I'd want them seeing my personal profile.(on social media)” (25-34 male)
• “I prefer that I can't be identified as a client of the advisors. (on social media)” (25-34 male)
Addi>onal behavior or feature that affect an investor’s decision when choosing an advisor (both online & offline)
10. Don’t believe is necessary on social media:
• “None. I feel like financial advisors should be more concerned w/ managing clients' money, instead of soliciting/marketing on social media.” (35-44 male)
• “I don't think social media would cause me to choose an advisor. I'd need a lot more information, particularly about past returns & their overall process.” (25-34 male)
• “I wouldn't choose one through social media. I chose mine through research and don't care that they are not online much - we connect via email.” (45-54 female)
• “I would not choose an advisor through social media. I might use social media to identify potential advisors.” (45-54 male)
• “I am unlikely to choose an advisor through social media. I would like to become an advisor, but early in my journey.” (45-54 male)
Addi>onal behavior or feature that affect investor’s decision when choosing an advisor (both online & offline)
I would not choose an advisor through social media. I might use social media to idenEfy potenEal advisors.
(45-‐54 male)
I would base the decision off a referral and my interview. Social Media would be a way to gain a picture of the individual.
(35-‐44 male)
Addi>onal behavior or feature that affect investor’s decision when choosing an advisor (both online & offline)
Other information from investors: • “LinkedIn’s company website and blog are all
useful but not sufficient for money decision.” (55-64 male)
• “Twitter & Linked are important. Facebook is not.” (45-54 male)
• “I would base the decision off a referral and
my interview. Social Media would be a way to gain a picture of the individual.” (35-44 male)
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ABOUT OUR RESPONDENTSSurvey duration (3 months):
Total respondents:
232
Completed rate:
80%
Gender:Total value of investment:
71%
29% 25% 25%
50% Mainstream
Emerging Affluent
High Net-Worth
Currently investment products:
75#
149#
126#
77#
26#
27#
27#
87#
44#
136#
13#
Bonds!
Stocks!
Mutual Funds!
ETFs!
Commodities!
Hedge funds/alternative!
Futures and options!
Real estate!
College savings!
Retirement savings/accounts!
Impact/other thematic investing!
ABOUT OUR RESPONDENTS
Geographic:
Using social media:
Age range:Individual investorsinvest in US
Author: Yi-Hsuan Chen, Passionate Marketer in the Financial Industry and the Marketing Manager of Finect. She received the Advanced Business Certificate (ABC) in Marketing Intelligence during her MBA in the University of Connecticut.Contact: [email protected]
< 25! 25-34! 35-44! 45-54! 55-64! > 64 !
Yes, 87%
No, 13%