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Financial Planning > Behavioral Finance

High-Net-Worth Clients: To Friend or to Tweet?

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Millionaires prefer Facebook, so why are financial services firms flocking to Twitter? Put simply: Twitter is easier.

The number of high-net-worth individuals using Facebook has doubled in the last year to 46%, according to a report released by Spectrum Group. And ultra-high-net-worth individuals aren’t far behind, using Facebook in similar numbers. Twitter is far less popular among millionaires, with only 3% to 6% using the site.

But financial services firms aren’t in sync with their top prospects when it comes to social media. A Corporate Insight report released earlier this month found that Twitter use by financial services firms has grown exponentially in recent years, while Facebook use has grown at a more modest rate.

In 2008, Corporate Insight found that while 32% of financial services firms used Facebook, only 15% used Twitter. Just three years later, the number of firms using Twitter has exploded, with 67% of surveyed financial services firms saying they use Twitter to reach clients but only 59% saying they use Facebook.

According to Alan Maginn, senior analyst at Corporate Insight, the popularity of Twitter among financial services firms is a result of the microblogging site’s tight focus: “In our opinion, Facebook is more of a relationship-driven community, whereas Twitter is more content-driven. Facebook is a more challenging environment for businesses because, in order to be successful, they must foster a relationship with their fans. With Twitter, they can concentrate more on the value of the content they produce.”

In other words, Twitter gives financial services firms an easy means to convey their message. But as everyone in the financial services industry knows, relationships trump message every time.

A Twitter campaign is much for firms easier to launch when compared to Facebook—which requires more steps and orders of magnitude more information than Twitter—but the takeaway from the study is clear: Tweeting is an easy way out that isn’t as likely to reach the prospects you covet most.

If you’re going to make the foray into social media marketing, you’d be far better served by putting your effort into a more full-featured platform like Facebook or LinkedIn.

When you’re talking, you’d better be sure someone is listening.

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See also The Law Professor’s blog at AdvisorFYI.