Private banking and the social media emergency

After the updated FCA's guidance in the summer of 2014, the wealth management industry has a much better understanding of social media

Following the launch of the updated FCA’s guidance in the summer of 2014, the wealth management industry has a much better understanding of how to remain compliant when using social media platforms.

Among wealth managers and private bankers there is almost an emergency – and sometimes confusion – around the topic of how to make a proactive use of social media tools.

Consultancy Mercer’s 10 priorities for wealth management advisors in 2015, ranks ‘adopting a client communication technology strategy’ among the top priorities for firms.

It states: “Disruptive technology is transforming the wealth management industry and we expect the pace of change to accelerate with increased use of cloud computing, applications, social media and mobile (CASM).”

Communication and direct access to portfolio information is frequently cited by clients as their main frustration, the firm also says. 

In addition to that, research firm MyPrivateBanking, found that global wealth managers remain weak in social media, when compared to the retail offering.

Specifically, the wealth management and private banking divisions of major banks earn a score of only 27% for their Twitter streams when it comes to user activity (re-Tweeting or having conversations on Twitter).

The research found that high-net-worth (HNW) clients are in many cases put off by social media that is not interesting, not up-to-date and not interactive.

According to the firm’s latest research, the winners for the best social media presences in wealth management and corporate/investor relations was Barclays with 88% of maximum possible points.

Many industry commentators have said LinkedIn and Twitter will remain the top social media channels throughout 2015. They also said social media will become the number one channel for clients’ complaints.

Undoubtedly, firms that want (and need) to engage in social media conversations have an interesting time ahead.

As many argue, one of the main challenges for private banks will be around the Ultra space (individuals with assets of more than $30m) as they tend to minimise their online presence.