You might think that people who own polo ponies, yachts, private jets and ritzy club memberships would have better things to do than frequent the public byways of the Internet.
Yet high-net-worth investors use social media, like LinkedIn, even more than their less-wealthy counterparts, according to February 2011 Affluence Collaborative survey, reported recently by EMarketer.
It even stands to reason that wealthy investors tend to be more savvy about the market and are early adopters of any tools that will help them expand their influence in their social and business networks.
At the same time, the very wealthy have legitimate privacy concerns.
High-net-worth investors are increasingly:
- Spending more time on digital devices.
- Time crunched.
- In need of immediate access to expert problem-solving solutions.
Data shows that 70% of family offices fail. The current business, legal/regulatory and investment environment is very challenging. If your solutions are the best and no one knows – you still lose. So do the potential UHNW clients. This makes using social media – if properly done – vital to your practice.
Morgan Stanley faux pas
Using scripted content to advertise your firm- as Morgan Stanley recently did – is a common mistake among financial services firms and advisors.
Scripted content in social media is the definition of spam. Might as well have bots representing MSSB and it’s professionals!
The main source of “energy” and sustenance in the social media ecosystem/world is real-time, personal views/opinions/links/information sharing.
They are doomed to not only fail but likely hurt Morgan Stanley’s brand and the reputations of its professionals.
Only allowing scripted involvement on social media is proof they have no understanding of the medium. Imagine receiving social media communications, or even emails, phone calls, faxes, from someone who you are trying to get to know and build a relationship that are scripted!?
One way we responded to requests from family office stakeholders on LinkedIn and have established a “sales and spam-free” family office-oriented LinkedIn discussion group. Unfortunately, other LinkedIn discussion groups labeled as family-office oriented are either moderated by sales people or overwhelmed by aggressive sales types flogging their wares. This has the effect of turning potential high-net-worth users off all social media sites.
Forget being 'friends’ or 'liked’
Being respected and listened to is the goal of the best professionals. Being “liked” or having lots of “friends” is for teenagers. The wealthy want expert problem-solvers – they already have friends and families.
When using social media your reputation is on the line. You must be expert and compelling enough to impress your target audience.
Problem: Zero growth and erosion of existing client base.
Background: Our client only serves UHNW and accredited investors. They produce expert, problem-solving ideas on a daily basis. However, they are so busy with the daily operations of their business and client service, they have allocated no time or resources for business development and growth.
Solution: We set-up a network of social media for daily distribution of their IP and gave them digital tools to receive feedback from the market. These include:
- E-mail blasts
- Media press releases
- Webinars and podcasts
Most importantly, we added a short, fully-compliant video of our client.
In the first 30 days after the roll out of the social media campaign, the advisor’s qualified prospects doubled. The video proved to be the critical piece.
Actually, the limiting factor now is closing all the new prospects. It’s important to have the staff and resources to deal with increased response.
Social Media Checklist
There must be a steady flow of problem-solving content, ideas, links and opinions data flowing to all communications channels
The material must be communicated in a steady, balanced, professional style but also with a human touch.
You must share good problem-solving stories. Wealthy clients do not want to hear stories about you and your firm but about people like them with problems you helped to resolve.
Our minds are designed to remember stories, not statistics. Steer clear of numbers, analysis or anything technical.
Don’t make it personal: Your hobbies, passions, kids and vacations are best shared with your social network and family, not your clients – unless they involve private jets, multimillion dollar yachts. etc.
Commitment and consistency are mandatory. Don’t even start in social media if it is not going to be a serious and well-funded effort. You never want to look like an amateur in front of the UHNW.
Pilot and test your social media before going live. You will make mistakes so make them in private.
Elmer Rich III is the principal of Rich and Co. Growth in Chicago