How Social Media has Changed the Financial Buyer
October 2, 2013
Affluent Financial Buyers Rely on Social Media
Today’s buyer of financial services is socially empowered and tech-savvy, and this is especially true of the affluent population sector. In order to learn about the social media habits of high net worth investors, LinkedIn collaborated with Cogent Research in 2013 to conduct a survey of over 600 individuals with investible assets over $100,000. The survey results demonstrate that this group relies heavily on social media when researching and deciding about financial products. The information yielded by this survey points the way for how financial institutions can best engage with affluent investors.
The term "mass affluent" is used to describe individuals who have investable assets between $100,000 and $1 million. At this time, 40 million people in the United States fall into this category. Almost 90 percent of this group are active users of social media, and 44% include financial institutions in their social networking. Thirty-four percent specifically engage with content from these financial companies, by following posts, commenting, “liking” and sharing content.
The two main purposes served by their social media engagement are:
- Discovery of new companies, products and accounts.
- Consideration of what they have learned, through seeking and offering advice.
Of the people who use social media for the purposes of both discovery and consideration, 63% of them make choices and take action on the basis of what they have learned. This action may take the form of opening an account, purchasing a new product, or establishing a new relationship with a financial company.
It’s helpful to break down the category of “mass affluent” into three distinct life stages, because buyers in each life stage are seeking something slightly different from their social media engagement:
- Accumulating wealth: These people place the highest value on relevant content. They expect banks and credit cards to have a social presence because they're younger and more deeply engaged in social media for all aspects of their professional lives.
- Soon-to-retire: Timely updates are most important to people in this sector. They expect brokerages to have a social presence.
- Retired: These folks value customer service.
While advertising still provides the largest portion of information about financial companies, the updates and content that these companies post on social networks is becoming an increasingly important part of marketing. Thirty-eight percent of survey respondents said they learn about financial institutions from company-sponsored content or updates, and 34% said they learn about financial products or accounts in this way. Communicating with others in their social network is also an important way people discover and consider financial buying options: 34% of “mass affluent” social media users report learning about financial companies through their own social network and 25% rely on it to discover new financial products and services.
The survey respondents expressed a clear interest in specific types of content and information, and their wishes reveal a communication gap between the information they want to see and what is currently offered by financial institutions:
From brokerages, the affluent consumer wants to see content that includes:
- New product information
- Market commentary
- Product performance data
From banks and credit card issuers, they want to see:
- New product information
- Account change updates
- Company information
The brokerages and banks aren't currently providing the content that customers most want. The greatest discrepancy, or communication gap, exists in the area of brokerages providing new product info, but all areas of financial content display a communication gap of between 27% and 40%.
On LinkedIn, financial brands can build a social media foundation through posting company content and providing service or support. Once the basic foundation is in place, these companies can accelerate their influence by using LinkedIn Sales Solutions to host group discussions and to enable 1 to 1 communication. Since social media is centered on relationships, this type of communication is necessary in order to reach and influence affluent buyers.