- Published: February 2009
Social Media in Wealth Management
- Published: January 2009
- Region: World
- VRL Financial News Publishing
In changing times industry players have had to open up to using new marketing techniques in order to raise awareness of their existence and communicate the benefits of their services to a new audience.
At the very least Wealth Managers need to be aware of what web 2.0 is (for the record a form of media that encourages interaction and collaboration), as for many consumers it is already become an expected part of the marketing mix. This report, with it’s glossary of key terms does just that.
Traditionally an industry that encourages discretion, wealth managers need to embrace new channels of engagement to ensure they maintain their share in an ever evolving financial landscape.
Web 2.0 allows wealth managers to provide personalized and reactionary marketing to a previously untapped and progressively modern audience, reflecting the high-level, tailored service High-net-worth individuals can expect from their services going forwards.
The tools explained
- Blogs and podcasts
- Social networking sites
- Consumer-generated ratings and reviews
- Integrated personal financial management (PFM) solutions
- Viral marketing
- Interactive online tools such as widgets, mash-ups, RSS feeds, virtual agents, and instant
Beyond this Wealth Managers will need to understand 2.0’s potential to improve outcomes in a range of areas, including:
- client interaction and experience (in particular freeing up the time of client advisors)
- product development
Finally they can take comfort from the fact that while financial services institutions have been slower than many other industries to embrace web 2.0 there is already a huge source of case study and best practice tactics to base their own strategies upon. SHOW LESS READ MORE >
Section I - The case for using web 2.0 to build customer engagement
Chapter 1 - Web 2.0 and customer engagement
Chapter 2 - Customer engagement and web 2.0 in customer service
Chapter 3 - Customer engagement and web 2.0 in marketing The declining effectiveness of traditional
Chapter 4 - Customer engagement and web 2.0 in market research and product development
Section II - Web 2.0 tools for customer engagement
Chapter 5 - Blogs
Chapter 6 - Podcasts
Chapter 7 - Social networking sites
Chapter 8 - Online communities
Chapter 9 - Virtual worlds
Chapter 10 - Consumer-generated ratings and reviews
Chapter 11 - Personalisation and customisation
Chapter 12 - Online personal financial management tools
Chapter 13 - Interactive online
Chapter 14 - Viral marketing and multimedia
Section III - Success factors in engaging customers with web 2.0
Chapter 15 - Authenticity
Chapter 16 - Starting out
Chapter 17 - Risk management
Chapter 18 - Measuring customer engagement with web 2.0 initiatives
The common reaction of many wealth managers upon hearing about the need for ‘Web 2.0’ as part of their activity is to comment ‘we haven’t yet come to terms with web 1.0’. And on hearing the term ‘social media’, many remark that their industry best practice encourages discretion, which by its very nature does not involve the media. Others can point to the dismal failure, over a decade ago, to create on-line personal finance programmes for affluent segments.
However, in changing times industry players have had to open up to using new marketing techniques in order to raise awareness of their existence and communicate the benefits of their services to a new audience.
Increasing numbers of wealthy individuals from diverse backgrounds means that traditional providers of services to the rich, from luxury goods companies to private banks, must adapt if they are to succeed. Today the majority of wealth is self-made rather than inherited and private banks and wealth managers need to target a new type of client. Although inherited wealth is set to play a smaller role, the transfer of wealth from the ‘Baby Boomers’ to Generations X and Y is a crucial factor. These generations are set to become the beneficiary of the largest global wealth transfer in history with an estimated US$500 billion to be handed over by 2015. For banks looking to capture this sector, the challenge is to adapt their communication and marketing strategies to meet the needs of the younger generation rather than provide the service offerings designed for their parents and grandparents.
The recent Merrill Lynch/CapGemini World Wealth Report 2009 states:
“Youngerand middle aged HNWIs were more likely to leave or withdraw assets in 2008. As new generations begin to make up a larger percentage of the HNWI population, firms will need to take closer look at the needs and expectations of these younger, more vocal HNWIs. This group may, for instance, demand a more innovative use of technology and media for communication than traditional clients.”
Wealth Managers are increasingly looking to attract those who have very little, or perhaps no experience of a private banking service. With estimates suggesting that only a tiny proportion of those who could use a private banking or wealth management service currently do so, and as arguably confidence in the banking industry has never been lower in recent years, there has never been a bigger opportunity for individual banks to gain clients through investing in new forms of brand communication.
At the very least Wealth Managers need to be aware of what web 2.0 is (for the record a form of media that encourages interaction and collaboration), as for many consumers it is already become an expected part of the marketing mix. This report, with it’s glossary of key terms does just that. Those in the wealth space will also need to understand, as a minimum, the appropriate culture and guidelines needed for employees to use social media – on behalf of the company and privately.
Beyond this Wealth Managers will need to understand 2.0’s potential to improve outcomes in a range of areas, including: client interaction and experience (in particular freeing up the time of client advisors), marketing, and product development. Finally they can take comfort from the fact that while financial services institutions have been slower than many other industries to embrace web 2.0 (mainly owing to aversion to the operational, compliance, and reputation risks that come with employees’ use of the media and the proliferation of consumer-generated content, in what is a new and unknown medium) there already is a huge source of case study and best practice tactics to base their own strategies upon.
The tools explained
Blogs and podcasts are easy to establish and are often the starting point for a web 2.0 strategy. They give the company a voice that sets the tone for brand and client experience. However, unless a blog or podcast series is launched for a time limited campaign it represents an open- ended commitment - and some observers have questioned the return. The biggest challenge is providing regular content that is informative or entertaining for readers. Banks with blogs generally report that, while feedback is positive from those customers who do interact, there are only modest levels of participation.
The popularity of social networking sites has led many observers to view them as the next big opportunity in online marketing, and a powerful way of engaging younger demographics. However, marketing on social networking sites has had limited success so far. The main reason is that users are too engrossed in communicating with their friends to be responsive to advertising. Online communities are a valuable resource for engaging customers and gathering feedback and market insights.
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