Within the wealth management industry (and many others), social media is irreversibly affecting the way customers stay informed, how they make decisions and how they interact with businesses. Wealth managers must keep up with the shift or risk falling behind and exposing themselves to significant reputational and commercial damage, writes Angshuman Dey.
The lines between the real world and the virtual world are blurring. Social media is the number one activity online with 1.8 billion users globally and this, coupled with the impact of instant access through smartphones and tablets, is affecting everything we do as individuals and how we do business.
Leaders in the wealth management industry can often ignore social media because of a misunderstanding that it is purely vanity marketing play. And they perceive it as too youth focused to appeal to their often older and more traditional clients. Within the wealth management industry in Qatar, social media presence is limited, with individuals and organisations still largely choosing to engage with clients and potential clients through traditional methods (face to face, on the phone and via email).
However, in many parts of the world, large wealth management houses are increasingly growing their social media presence, frequently using Twitter, Linkedin and Facebook to keep clients informed of market developments and provide a platform
It is unsurprising however, that Qatar-based wealth managers (WMs) are more reluctant to embrace social media, with the potential risks being considerable:
Improper or inactive management of client enquiries through social media can lead to dissatisfaction – WMs must commit to being available 24/7 if they choose to engage clients through these channels.
- Social media can leave an individual or organisation exposed – if a piece of incorrect or misleading information is shared and as a result, acted upon, the impact on clients and the market can be significant – not to mention the potential legal ramifications for the person who posted the information.
- Consumers are increasingly looking for real-time information that could impact their investments and if WMs fail to provide this, they are in danger of losing business to competitors and being seen as uninformed.
Qatar has the highest smartphone usage in the Middle East with 75 percent of the population owning an Internet enabled handset. Despite the risks, with this in mind, WMs must embrace the opportunities that social media brings to stay competitive.
Social media is now the place to find out about market activity before it hits the headlines and, if WMs are actively engaged, they can ensure that this information reaches their clients as it breaks, giving them the edge over competitors and demonstrating that they are deeply entrenched in the industry.
WMs can also monitor social media to gain insights into market and consumer behaviour. What should WMs be doing with social media right now?
Observe it. Review your social media landscape; this includes what people are saying about your (and your competitors) products and services.
Get on with it. Social media is happening whether you are ready for it or not. Customer expectation is changing so embrace it.
Understand it. There are social media opportunities and threats to your business.
Become part of it. Seek out opportunities to be proactive in the wealth management space online.
Be prepared. Do not ignore your weaknesses. Be prepared to manage crises.
Plan for it. Develop a high-level plan that focuses on different sectors and client groups, put some governance around who and how you use different channels.