No Longer Optional: Using Social Media to Reach Ready-to-act Investors

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While social media use is the norm among affluent investors overall, recent findings reveal that ready-to-act (RTA) investors—those who plan to make a new investment in the next three months—are using social media at even higher levels. RTA investors report using at least 2.4 social media sites each month on average compared with an average of only 1.8 social sites for affluent investors who do not plan to make an investment decision in the near-term. More specifically, compared with all affluent investors, RTA investors over-index on visits to Facebook, YouTube, LinkedIn and Twitter. A social media presence is no longer optional but is quickly becoming a mandatory component of a distributor’s or product provider’s successful marketing plan and media buying strategy.

Looking at the four major social media platforms in more detail reveals two distinct use tiers:

  • Tier 1, Facebook and YouTube: Used by a majority of affluent investors, with each becoming a nearly ubiquitous presence across the RTA segments.
  • Tier 2, LinkedIn and Twitter: Draw dramatically higher use among RTA investors compared with the broader audience of all affluent investors. This highlights the potential value offered by these platforms in targeting an audience that is ready to make an investment decision

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Loyalty Has Benefits On and Off the Field

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With Super Bowl LII behind us, the professional football season of 2017–2018 is over but a tremendous amount of loyalty remains among New England Patriots and Philadelphia Eagles fans. One doesn’t have to spend too long watching an NFL game to witness what loyal fans will do to cheer on their team in the pouring rain, sub-zero temperatures, or near-whiteout snowfall. The feeling of support and allegiance from fans for their teams is palpable.

What drives fan loyalty? The team, an individual player, the coach, the owner or various combinations of all of the above. Influence on loyalty from a combination of factors also holds true for investors working with advisors and other investment professionals and their respective firms. In fact, the industry average loyalty to an investment firm among advised investors is substantially higher than among the overall affluent investor population, indicating that the inclusion of a financial advisor or other type of investment professional offering advice is key to client loyalty, referrals and retention. Continue reading

Advisors Win in Aftermath of DOL Fiduciary Rule

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Advisors Win in Aftermath of DOL Fiduciary Rule

Use of advice leads to stronger trust in the industry

While many industry insiders feared the worst, financial advisors actually fared very well over the past year—a year filled with threats of the Department of Labor (DOL) fiduciary rule casting doubt on the industry overall as well as creating intense scrutiny on fees. In research earlier this year, we observed financial advisors were feeling positive about the intention of the fiduciary rule but also concerned about the implementation potentially damaging their reputation among investors. Remarkably, quite the opposite occurred.

While many advisory firms moved forward with changes in how advisors provide financial planning and communicate guidance, especially with respect to IRAs, only about one-third of affluent American investors became aware of the fiduciary rule. Among those familiar with the rule, most reported their impression of advisors was unchanged and an additional 27% cited that their perception of advisors had actually improved, evidence that preparation efforts toward compliance with the rule were not in vain, even amid the extensions and delays recently announced with fiduciary rule efforts.

Perhaps most telling is the level of trust in the investment community among affluent investors working with financial advisors, as it is significantly higher compared with prior years. In fact, more affluent investors have turned to a financial advisor in 2017 as a trusted source of investment. Continue reading

How to Expand Traditional Banking Relationships

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How to Expand Traditional Banking Relationships

Opportunity Lies with IRAs and the Younger Generations

National and regional banks are facing a big challenge in establishing themselves in the wealth management industry—even among their best, most affluent bank customers. Although it would seem to be a natural extension of banks’ offerings, fewer than 20% of affluent investors would even consider their primary bank for wealth management products and services. Moreover, banks claim an average of just 20% of the total assets from the few customers who would consider them for wealth management offerings, so there is ample opportunity for wallet expansion among banks’ current client base.

To dive deeper into potential opportunity, we asked affluent investors how likely they would be to consider their primary bank for a list of wealth management product and services. Nearly one in five would consider opening an IRA with their primary bank. This positions IRAs as a gateway for aspiring banks to move traditional banking customers into their wealth management businesses and obtain a greater percentage of their customers’ overall assets.

Highlighting an opportunity to target further, significantly more affluent Millennials and Gen Xers are likely to consider their primary bank for wealth management products and services than not. Targeting these younger generations through their preferred digital platforms will give banks an edge and the potential boost to consideration from these investors. Continue reading