Why Advisors Should Take Twitter Seriously

Financial advisors shouldn’t overlook Twitter Inc., which has more than 310 million active users. For those who take it seriously, the social media platform can help drive traffic to advisors’ web sites, establish them as an authoritative voice and is also a way to communicate with clients and attract new ones, research by Spectrem Group has found.

“Twitter can be advantageous to financial advisors in two ways,” Spectrem Group President George H. Walper, Jr. said in a statement. “It can be used to keep up-to-date on industry trends and issues via newsmakers and opinion makers, and it can also be used to communicate this information to clients and to establish one’s self as an information resource.” (For more, see: How Financial Advisors Can Best Utilize Twitter.)

Spectrem’s report, Financial Behaviors and the Investor’s Mindset for the mass affluent, millionaire and ultra high-net-worth investor, found that Twitter usage might be less superficial than you might think. For example, affluent investors (those with a net worth between $100,000 and $1 million) are more likely to follow political and news commentators and financial and/or investment commentators than athletes and entertainers.

Engagement with Twitter generally increases with wealth. One-third of mass affluent households follow political commentators and news commentators, while 18% follow financial and/or investment commentators. Among millionaire investors with a net worth up to $5 million, this rises to 41%, 43% and 24%, respectively. There is a further uptick among ultra high-net-worth investors (those with a net worth between $5 million and $25 million). Four in 10 follow political and news commentators and 28% follow financial and/or investment commentators. Across all wealth levels, affluent investors are more likely to follow financial and/or investment commentators than their financial advisor. Spectrem points out that this represents an opportunity for advisors to establish their presence on Twitter.

In its analysis by age of the mass affluent and millionaires, Spectrem found that millennials are most likely to follow their financial advisor. Ultra high-net-worth millennials and Gen Xers, meanwhile, make up the largest percentage of those who follow their financial advisor on Twitter. (For related reading, see: How Financial Advisors Are Leveraging Social Media.)

Spectrem recommends the following tips for financial advisors who use Twitter.

• Adhere to compliance guidelines and company’s social media policy when tweeting.
• Spend time on tweets. Be careful and thoughtful about what you want to communicate. Get feedback before you hit the send button; Spectrem warns that regulatory requirements likely mean firms archive Twitter output.
• Use tweets to promote blogs or to link to articles followers will find interesting.
• Tweets are more engaging with appropriate images.
• Tweets should be true to the advisor’s personality.

Twitter has also become a popular forum for consumers to complain and get results. “Dissatisfied investors with a social media mindset can certainly use Twitter to complain about products or services, and advisors need to prepare for such occurrences with a constant monitoring of Twitter, as well as other social media sites,” Walper said.

In a separate study, Spectrem found that that 7% of ultra high-net-worth investors have complained via Twitter to their financial services firm. All got responses. (For related reading, see: Social Media 'Don'ts' for Financial Advisors.)

Perhaps not surprising, young investors tend to use Twitter more than their older counterparts to complain. Forty percent of millennial ultra high-net-worth investors have complained to their financial advisor and received a response. Only 3% of millionaires have tweeted a complaint but this includes 22% of millennials and 8% Gen Xers.

Financial advisors who haven’t already done so should consider taking Twitter seriously. When used the right way, it can establish advisors as an authoritative voice and help to communicate with clients and attract new ones. (For related reading, see: Twitter Tools Advisors Should Consider.)