From the September 2011 issue of American Agent & Broker • Subscribe!

IQ: Rich Customers: Advisors Who Don’t Use Social Media “Behind the Times”

Financial advisors who don’t maintain a social networking presence are considered out of touch by their affluent customers, according to a new survey by Spectrem Group.

The poll of approximately 2,500 affluent investors found that many consider an advisor "behind the times" if they do not use social media in some capacity. Nine percent said they would actively research potential providers to evaluate their social media activity, Spectrem said.

Although wealthy investors have been slow to embrace social media compared with other demographics, this is changing in a hurry, according to the survey. Approximately half of respondents said they currently use Facebook, almost twice the percentage as in 2010.

Twitter participation remains near 5 percent, while LinkedIn use has risen from 10 percent to 22 percent among the mass affluent. Nineteen percent of millionaires now use Twitter, up 2 percent from the previous survey, while usage among ultra-high-net worth investors has risen from 18 percent to 26 percent, according to the survey.

"Led by Facebook, the social media era has finally arrived for the nation’s wealthiest investors, with nearly half the nation’s millionaires now logging onto the social network," said George Walper Jr., president of Spectrem Group. "Learning how to effectively use social media and financial blogs is critical to the future success of financial services firms. Providers who fall behind run the risk of frustrating their investors and losing customers."

Twelve percent of wealthy investors say they read financial blogs, while 22 percent either read or are interested in reading blogs from trusted financial advisers.

The report recommends that financial advisers blog and post to Facebook and Twitter as well as encouraging online interactions with their clients.

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