Don’t disregard Facebook—a report released Tuesday by Spectrem found that the number of millionaires who use the social networking site has doubled since 2010 to 46%.
Also using Facebook are similar percentages of ultra-high-net-worth investors, those with a net worth of $5 million to $25 million, and mass affluent investors, those with a net worth of $100,000 to $1 million.
Ultra-high-net-worth investors are the most likely to read blogs by trusted advisors (30%), followed by mass affluent investors (21%) and millionaires (20%). LinkedIn is also popular, with between 19% and 26% of investors using the service.
“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,” George Walper Jr., president of Spectrem Group (left), said in a statement. “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,” he added.
Advisors have got the message. A Cerulli report released Aug. 9 found that 63% of advisors who were on the fence about adopting social media in 2010 have started using it in 2011. Furthermore, 13% say it is a key element in their marketing strategy.
Spectrem found that while millionaires appear to look at social media favorably, they have their favorite sites. While Facebook and LinkedIn were popular among the wealthy, Twitter ranked much lower, with just 3% to 6% of investors using the micro-blogging site.
The Cerulli report, however, found that advisors are employing Twitter more often than any other social media site. Over half of advisors who use social media were using Twitter, compared with 38% who use Facebook and LinkedIn.
Social media’s rising influence may have some advisors feeling like they’re stuck between frustrating those wealthy clients and risking their own compliance record. Socialware, a social media compliance and engagement consultant, also announced Tuesday that it has secured $7 million in Series C funding led by Morgan Stanley Expansion Capital to enhance the firm’s platform.
“As large firms step forward to promote their social media strategies, organizations throughout financial services are now lining up to demonstrate their leadership in the race to social media engagement,” Chad Bockius (left), CEO of Socialware, said in a press release. “This proves the competitive value firms are attributing to social networking.”
Throughout 2011, several large firms have announced that they will allow advisors to use social media in their practices, including Morgan Stanley, which uses Socialware to capture and retain social media messages from its advisors, Raymond James and Commonwealth.