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5 ways wealthy investors use social media

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How do wealthy investors use social media and mobile technology in financial decisions?

A new report from Spectrem Group takes a peek inside investors’ mobile and social lives to find out how investors are using social media and other emerging technologies in their financial dealings.

The report, Using Social Media and Mobile Technology in Financial Decisions, examines the trends by three wealth groups: 1,139 mass affluent investors, with a net worth between $100,000 and $1 million; 1,253 millionaire investors, with a net worth between $1 million and $5 million; and 588 ultra-high net worth investors, with a net worth between $5 million and $25 million.

The report finds some interesting age-related implications — for example, the older and wealthier the investor, the less likely they are to rely on social media.

The report finds that the strongest engagement in social media and communications technology is found among the youngest millionaires. And, the youngest millionaires comprise a small portion of total millionaires.

“[These] facts make it very tempting to believe that social media and communications technology can safely be ignored by the financial community,” the report states. “Assuming that one can safely ignore these developments would be a serious mistake.”

As the report points out, these current “young” millionaires will soon become middle-aged millionaires and will most likely increase their wealth over time.

In addition, new entries into the millionaire ranks will most likely be “young” and bring their technology and social media use with them, the report states.

The report is full of tidbits on how age and wealth affect social media and mobile technology use. Here are five notable findings.

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1. A surprisingly large percentage of the ultra-wealthy do not use social media.

According to the study, nearly 30 percent of all the UHNW investors surveyed do not. Broken down by age, the percentage is highest among those older than 65 (37 percent).

In comparison, 26 percent of millionaires surveyed do not use social media, and 21 percent of the mass affluent segment do not.

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2. Across all wealth groups, younger investors are more likely to rely more heavily on social media than on traditional channels for information.

The study finds that 31 percent of mass affluent investors ages 35 and younger rely more on social media than traditional channels for their information, compared with 4 percent of mass affluent investors over the age of 65 who do so.

It’s also significantly higher than its wealthier counterparts. According to the study, 21 percent of millionaires ages 35 and younger rely more on social media than traditional channels for their information and 18 percent of UHNW investors ages 48 and younger do so.

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3. The study finds that there is limited interest among the wealthy in having the financial community engage in social media — except for the youngest age groups.

When choosing an advisor, a quarter of millionaires under 35 will consider an advisor’s use of social media, and 14 percent are more likely to be interested in an advisor who uses social media.

Neraly a quarter of UHNW investors under 48 (24 percent) would also look at how much an advisor or provider uses social media to communicate with customers if they were choosing a new advisor or provider.

The same goes for investors with less wealth. According to the study, the least wealthy mass affluent investors are the most interested in a financial service firm providing information via social media.

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4. Only a small percentage of wealthy investors use Twitter (16 percent of the mass affluent, 13 percent of millionaires and 11 percent of UHNWs), according to the study.

An even smaller percentage follow their financial advisor on Twitter (4 percent of the mass affluent, 4 percent of millionaires and 5 percent of UHNW).

Wealthier investors are more likely to follow financial or investment commentators (19% of millionaire and UHNW investors respectively, compared with 16 percent of mass affluent).

Similarly a small percentage of wealthy investors follow their advisor on Facebook and LinkedIn.

The study finds that only 3 percent of the mass affluent investors currently follow their advisor on Facebook, and 5 percent follow their financial advisor on LinkedIn.

“Keep in mind that until recently few advisors were allowed to use social media,” the report states.

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5. Video is the new frontier, according to the report’s findings.

“Websites and social media strategies need to include videos to remain relevant and interesting to investors,” the report states.

YouTube is the only social media platform to be used by more than 10 percent of the UHNW for any financial task: 13 percent use YouTube for watching videos on financial topics.

According to the study, 21 percent of the millionaires and 21 percent of the mass affluent investors surveyed watch financial videos on YouTube.

The study finds that financial information videos are the most popular, followed by financial commentators and current financial events.