Follow the money, embrace social media

By Vikram Barhat | October 27, 2010 | Last updated on October 27, 2010
3 min read

Mention social media to most advisors and they are more likely to think of their kids tweeting about the latest Justin Bieber track, rather than their high-net worth investors (HNWI). But the wealthy are more interested in social media than you might think.

That wake up call came at the Strategy Institute’s 12th annual Marketing Wealth Management Services to High Net Worth Individuals Summit.

“Lest we think the HNWI are not involved in social media, 45% of the millionaires we surveyed 18 months ago said they had Facebook page,” said Stacey Haefele, president and CEO of the New York-based HNW Inc., referring to a survey conducted by her organization. The data further indicated a high degree of HNWI engagement with other social media sites such as LinkedIn, Flickr and YouTube.

“As the affluent get younger and younger, advisors don’t exist if they don’t exist there,” said Haefele, urging advisors to create a social networking profile if they haven’t already. “If Bill Gates can have one why can’t our advisors?”

Gates has a LinkedIn account, although he has chosen to limit it only to five connections for now.

Haefele stressed that because of the evolution of Web 2.0 and its pervasiveness in society, the expectations of clients are mismatched with what the industry is able to deliver.

Corporate prohibition and industry regulations remain the biggest factors in discouraging more advisors from using social media, as they make the use of the medium too burdensome.

“Prohibiting is not the solution,” said Haefele. “You’ve got to be there and we have to find ways in the industry to make that OK; prohibition is not a strategy.”

It’s no secret that many clients nowadays are already actively engaged in social media. They are publishing and reading “what, in some cases, is crap” being dished out by unqualified people, she says.

“People who do have a qualified opinion are not in the conversation,” said Haefele. “We can’t be out of touch with our clients, or hamstring our advisors that way.” There is a pressing need to find real time ways of publishing and interacting with clients, without running afoul of compliance and regulators, she added.

It can start with small steps and she urged firms to seek ways to test and learn.

“You don’t have to go the whole hog and blog five days a week.” There are “small ways to test the waters” and one of the ways to do that is to harness the skills and experience of advisors who have a voice and are already engaged in social media via blogs or others communication platforms.

Social media profiles, she said, are an extremely powerful way to empower advisors and an effective tool for consumers to vet advisors for suitability. Haefele urged the Canadian industry to “lobby for cautious commonsense” as is being done south of the border.

“Let’s be sane about it,” she said adding Web 2.0 is a forward momentum and is worth thinking about. It is constantly moving and changing in the same way as human society and social norms change and evolve. “Things our kids do today as second nature were completely foreign to us as children and certainly would have been science fiction to our parents and grand parents.”

Invoking the spirit of the Chinese philosophical tradition, Daoism, Haefele said the way to keep up with the change was to wu wei: go with the flow.


Vikram Barhat