Wealth Management in the Age of Social Media

Cognizant in f %24 You Tube WEALTH MANAGEMENT IN THE AGE OF SOCIAL MEDIA http://cogniz.at/SocialForWealthMgmt The rise of a new generation of wealthy customers and their affinity for social media means wealth management firms need a robust social media strategy. Move over Boomers... $SSSS The next generation - generation X and millennials - are tech-savvy and seek peer advice on financial management through social media The wealth-accumulation phase of the 80 million Baby Boomers (born between 1946 - 1964) is drawing to a close 33% 22% of millennials want their financial services firm to provide of millennials believe their advisors' social media information via social media? usage is an important factor' 50% Millennials are self-directed of investors cannot find their advisors on but depend on advisors for special needs4 social media or figure they are not using social media SELF-DIRECTED TENDENCIES A recent survey revealed that 59% HAVE AN ADVISOR, most also describe themselves as "SELF-DIRECTED" INVESTORS (72%). What emerges is a generation that values INDEPENDENCE AND EXPERTISE Do not have 20% Regularly consult an advisor but mostly make their own decisions advisor 41% ADVISORS 8% Rely on an advisor for most decisions 59% Have advisor Advisor- reliant 35% Make their own decisions without an advisor 28% LEVEL OF RELIANCE ON ADVISORS 37% Make most decisions but use an advisor for special needs 72% Self-directed Studies indicate that only 2% of adult children continue to use their parents' financial advisor to manage their inherited wealth5 Social Media and the Wealthy of investors have changed their strategies or altered their relationship with investment providers based on the information available on social media6 70% Top Four Ways Investors are Most Likely to Use Social Media for Financial Purposes? Ultra-High- Net-Worth (UHNW) Rank Mass Affluent Millionaires $100,000 to $1 million in net worth $1 million to $5 million in net worth $5 million to $25 million in net worth You Tube * 10% You Tube * 11% You Tube * 10% Viewing financial and investment videos Viewing financial and investment videos Viewing financial and investment videos in 8% in 7% in 6% Finding a financial advisor Finding a financial advisor Communicating with a financial advisor f 6% f4% in 5% Reading financial or investment blogs Reading financial or investment blogs Finding a financial advisor in 5% in 4% f3% 4 Communicating with a financial advisor Communicating with a financial advisor Reading financial or investment blogs Response rate = 1,500 Response rate = 1,000 Response rate = 500 Benefits of Using Social Media for Advisors® Competitive advantage; quicker access to market-moving news 32.5% Found prospects 36.2% Establish industry expertise 47.9% Improved communication 58.3% with existing clients 20.9% Other of advisors acquired new clients through social networks with... gaining over $1 million in new assets 49% 29% How Advisors are Using Social Medialo 69% 66% 48% 47% 44% 44% 43% 35% 38% 28% 28% 28% 18% 20% 20% 9% 4% 4% 18% 8% 7% 5%, 6% 5% Improve the Cultivate specific effectiveness of referral network Improve referral Build brand identity Expand professional network Enhance prospective clients once they relationships are identified current client network LinkedIn Facebook Twitter Google+ Challenges in Using Social Media for Advisors" Resources 4% Don't see value 7% Education/Knowledge 15% Compliance 30% Time 44% The 5Cs of Social Media We recommend that wealth management firms develop a comprehensive social media strategy around five critical success factors: 01 Customer Insight Gain valuable customer insights from conversations and customer information and updates by deploying a social CRM solution to provide a targeted audience with tailored solutions 02 Content Develop a theme for shared content and publish a steady stream of targeted and differentiated content 03 Conversation Stir up online debates and seek opinions on advisors' investment philosophy, etc. 04 Channel Integration A seamless information flow between social media and other customer touchpoints helps enrich the firm's 360-degree view of the customer and ensures a superior customer experience 05 Compliance and Risk Management Design a comprehensive social media policy, keep abreast of regulatory changes and have robust workflow processes in place Invest in tools and technology for content monitoring, employee training, and social risk and reputation management Create robust internal security mechanisms and firewalls based on SEC guidelines to protect sensitive and private customer information For more information, read our white paper "“Wealth Management: Traveling the Social Street to Influence Minds and Investment Decisions" http://cogniz.at/SocialForWealthMgmt 1 https://advisors.vanguard.com/iwe/pdf/FASSRSB2.pdf?cbdForceDomain=false 2 https://advisors.vanguard.com/iwe/pdf/FASSRSB2.pdf?cbdForceDomain=false 3 http://www.thinkadvisor.com/2014/03/24/nearly-half-of-investors-cant-find-their-advisors 4 http://www.pbig.ml.com/Publish/Content/application/pdf/GWMOL/PBIG_Millenials_and_Money.pdf 5 http://wealthmanagement.com/practice-management/tearing-down-great-wall 6 http://www.businesswire.com/news/home/20130222005037/en 7 https://advisors.vanguard.com/iwe/pdf/FASSRSB2.pdf?cbdForceDomain=false 8 http://www.investmentnews.com/article/20140209/INFOGRAPICO2/140209919? issuedate=20140209&sid=SOCIAL2014 9 https://www.putnam.com/about-putnam/press-releases/putnam-investments-survey-on-social-media-points.jsp 10 http://www.slideshare.net/putnaminvestments/283425-revised " http://advisorwebsites.com/blog/social-media/how-advisors-are-using-social-media-in-2013/ The logos and company names presented throughout this infographic are the property of their respective trademark owners, are not affiliated with Cognizant Technology Solutions, and are displayed for illustrative purposes only. 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