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

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September 4, 2011 • Reprints

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.

For additional coverage of this issue and similar ones, we invite you to sign up with AdvisorOne’s partner, AdvisorFX, for a free trial.

See also The Law Professor's blog at AdvisorFYI.

About the Author
William H. Byrnes, Esq.

William H. Byrnes, Esq.

Prof. William H. Byrnes, Esq., LL.M., CWM, Fellow

Prof. William H. Byrnes, Esq., LL.M., CWM, Fellow, is the leader of Summit Business Media's Financial Advisory Publications, having been appointed July 1, 2010. He has been an author and editor of 10 books and treatises and 17 chapters for Lexis-Nexis, Wolters Kluwer, Thomson-Reuters, Oxford University Press, Edward Elgar, and Wilmington, as well as numerous commissioned, peer-reviewed, and law review articles. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, which subsequently amalgamated into PricewaterhouseCoopers, practicing in Africa, Europe, Asia, and the Caribbean.

He has been commissioned and consulted by a number of governments on their tax and fiscal policy from policy formation to regime impact. He has served as an operational board member for companies in several industries including fashion, durable medical equipment, office furniture, and technology. Since 1994, he has been a professional trainer for professional association conferences, government workshops, and financial service institutions in-house meetings.

Before Associate Dean Byrnes joined the administration of Thomas Jefferson School of Law, he was a tenured law faculty member at St. Thomas School of Law. He serves on the Academic Committee of the American Academy of Financial Management. He created the first online graduate program offered to wealth managers and life insurance producers without any legal background—see http://llmprogram.tjsl.edu (Graduate Program of International Tax and Financial Services, Thomas Jefferson School of Law).

Email: wbyrnes@nationalunderwriteradvancedmarkets.com

About the Author
Robert Bloink, Esq., LL.M.

Robert Bloink, Esq., LL.M.

Robert Bloink is a professor of tax for the Graduate Program of International Tax and Financial Services, Thomas Jefferson School of Law.

Previously, he served as Senior Attorney in the IRS Office of Chief Counsel, Large and Mid-Sized Business Division, where he litigated many cases in the U.S. Tax Court, served as Liaison Counsel for the Offshore Compliance Technical Assistance Program, coordinated examination programs audit teams on the development of issues for large corporate taxpayers, and taught continuing education seminars to Senior Revenue Agents involved in Large Case Exams. In his governmental capacity, Mr. Bloink became recognized as an expert in the taxation of financial structured products and was responsible for the IRS’ first FSA addressing variable forward contracts. Mr. Bloink’s core competencies led to his involvement in prosecuting some of the biggest corporate tax shelters in the history or our country.

 

Mr. Bloink's insurance practice incorporates sophisticated wealth transfer techniques, as well as counseling institutions in the context of their insurance portfolios and other mortality based exposures. 

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