The asset management industry has a way to go yet to truly capitalise from social media's marketing wonders - we run you through the what you should be considering...
At the start of this century, asset managers would never have dreamt of encouraging their clients to join their LinkedIn group or follow them on Twitter. In fact, many asset managers came under fire - even as recently as four/five years ago - for not fully understanding the power of social media and harnessing its capabilities quickly enough.
Fast forward to today, the landscape has certainly changed.
After the fund management sector lagged behind key industry voices like analysts, journalists and financial advisers; they quickly realised that in order to join the conversation, they had to – well – actually join the conversation.
At the last count, more than three-quarters of financial advisers were on social media (note that this number is at least two years old so, I imagine it has grown since) – which makes using these channels a very compelling way to access new clients and building existing relationships.
Launched in 2006, Twitter has certainly claimed its rightful place in the world of social media, despite critics initially predicting, wrongly, its quick exit soon after launch.
Although Twitter currently boasts some 300 million active users worldwide, it is still relatively under-utilised in financial services as a whole, never mind the asset management sector. But by not getting involved, fund groups risk missing out on communicating with the next generation of investor.
To be fair to the industry though, and financial services as a whole, it was only eight years after Twitter’s launch that the Financial Conduct Authority clarified what is ok or what is not when it comes to using social media.
The regulator stated that the same rules apply to social media as they do any other channel – which means risks should be made clear and approved by a qualified person.
• Financial promotions must be clearly identifiable as marketing and require a clear risk warning - note that these risk warnings cannot be included in the image alone as Twitter functionality allows users to switch off images
- Users must fit images to the dimensions of the social media channel to avoid the warnings being cut off; and
• The use of the hashtag to signify risk is not okay. For example – you cannot just tweet #risk to warn people about the risks involved with a product
So why should Twitter matter to the asset management industry?
A recent survey by the Internet Advertising Bureau (IAB UK) found some 90 per cent of consumers are more open to recommending a brand to others after interacting with them on social media.
According to these internet advertising gurus – consumers put substantial emphasis on brand when choosing a financial product – ergo, as funds are brands and brands are so important – it makes sense to capitalise by growing your brand via social media.
How do you tap into Twitter’s potential?
Smaller fund groups will understandably be reluctant, or unable, to dedicate man hours necessary to set up and nurture their Twitter presence – especially as one fund group pointed out, ROI is easier to calculate from other marketing strategies.
Add to that the fact at first a tweet holds very little value – so it is made even more difficult to gauge ROI.
However, it is only when the post is read, retweeted and ‘favourited’ that the tweet has any value. This is when that particular tweet is at peak engagement.
In this day and age – greater transparency and being seen as accessible is important, especially with the younger generation. Knowing that you can be contacted, tweeted at via an app is likely to do a lot for your brand image.
Who’s doing it right?
Reports have pointed to FE Alpha manager Neil Woodford’s @WoodfordFunds as an account with one of the best Twitter strategies.
The Twitter handle is well-branded, regularly links back to the investment team’s blog – which in itself is consistently updated with fresh content, personality-led.
The account also regularly informs and educates people – through imagery and thought-out replies to questions from followers. The account was launched last year – when Woodford left Invesco Perpetual – and within that space the manager has a 24 thousand-strong following.
Accounts that are doing it right all have in common:
- They engage with their followers (essentially their clients) about issues that would concern them.
- Respond to them with thanks you, ‘glad we could help’ etc
- Live tweet from events that are important to your industry and therefore to your clients/followers.
- Stay true to the brand and keep it relevant
- Tweet about things they do that showcase good work. Aviva regularly tweets about charitable events and work they do.
- And they don’t self-promote too much. Being helpful and sharing useful statistics etc will be a better way to keep people interested than constant marketing.
#tags, @s and compliance
Don’t forget that compliance is often the main barrier to social media – whether that is on Twitter or another medium.
A non-compliant post on social media makes a firm susceptible to bans and fines from the FCA – so it is important that you set out a clear Twitter use policy for your company. Highlight all risks, do not give advice unless you are qualified and double check stats before they go live.
Use # sign when you are talking about things so that your tweets pop up when people search the site. You might even get news organisations picking up your tweet – free marketing!
And lastly, use @ when replying to people – otherwise they will not get that the message is aimed at them.