NEW YORK: Almost 50% of US financial advisors interact daily with their clients using social media, demonstrating the rising importance of this channel across different sectors.
Accenture, the consultancy, surveyed 400 US financial advisors and 1,005 high-income individuals for its report, "Closing the Gap: How Tech-Savvy Advisors Can Regain Investor Trust."
As well as increased interaction on social media, some 74% of advisors believed this channel helped them increase assets under management. Half of these respondents also claimed to have successfully used social media to convert prospects into clients.
"The use of social media to interact with clients is a differentiator for advisors today, but it will be mere table stakes in the not too distant future," said Alex Pigliucci, global managing director of Accenture Wealth and Asset Management Services.
"Wealth management firms that fail to adopt social media will miss an opportunity to build relationships with clients on their terms. This is becoming increasingly critical as investors are demanding online resources to help them better understand investment strategy and advice."
The survey also revealed that financial advisors significantly overestimated the investment knowledge and risk appetite of investors.
Pigliucci noted that advisors needed to better understand their clients' views and foster closer relationships. "With the explosion of 'self-serve' digital investment channels and increasingly complex investment products, the importance of this will only grow," he said.
"Digital and social media tools can help advisors by increasing the frequency and quality of two-way communication with clients," he added.
He also called for firms to develop social media strategies and give advisors guidance that would make digital interactions more meaningful.
"This will help create tighter client relationships, increase the firm's visibility on digital channels and, ultimately, drive business for the institution," he concluded.
Data sourced from Accenture; additional content by Warc staff