The use of social media increases with wealth level, but decreases with age level, as might be expected, according to a new study by Spectrem.
But no matter who a financial advisor's clients are, according to the study, he or she will be obsolete if social media is not part of the advisor's tools.
The Spectrem study of the use of all types of social media by ultra-high-net-worth individuals revealed a growing demand for immediate communication capabilities. "Waiting for a hard copy newsletter is now obsolete," said the study, entitled Use of Mobile Technology, Tablets, Online Tools and Social Media Vol. II.
Spectrem surveyed 408 ultra-high-net-worth investors with $5 million to $25 million in investable assets not counting their primary residence. The average age for the investors was 67 and 60% were over 65.
For these investors, the use of tablets is growing at a faster rate than the use of smart phones, but smart phones are used by a larger percentage of the ultra-high-net-worth, according to the study. In 2012, 48% of those surveyed used smart phones compared to 39% the year before. Eight percent of the time on the smart phone was devoted to financial matters, according to Spectrem.
The use of tablets, not counting e-readers, grew from 20% in 2011 to 41% this year. But the home or office computer is still used more for financial information than either of the other two devices. The ultra-high-net-worth individuals use their home or office computer 24 hours a week on average, compared to using their tablets more than 12 hours and their smart phones seven hours a week (for activities other than talking or texting.)
Although younger people use smartphones more, 36% of the ultra-high-net-worth individuals over age 65 use the devices. Wealthier households are more likely to use them, with 73% of those with $15 million to $25 million using them.
Likewise, the use of tablets and e-readers decreases with age but increases with wealth, with 69% of those in the $15 million to $25 million using them. Similar to the usage of smart phones, 8% of the time on tablets is devoted to financial purposes.
The apps users want most for all their devices are those that give the ability to access personal account information, the ability to look up balances in one place from multiple providers, and the ability to look up articles and do research on financial topics.
Apple is the brand preferred by far for both smart phones (59%) and tablets (57%). Advisory firms with limited resources should develop the ability to provide apps for Apple devices first and then move on to others, said Spectrem. "The Apple iPad and iPhones are currently the most commonly used devices by the ultra-high-net-worth. Investors should be able to access these devices 24/7 to obtain account information."
About half of the ultra-high-net-worth individuals use Facebook, while a third use LinkedIn, 27% use YouTube and 8% use Twitter. "Given the older ages of this group, and the relative newness of social media, these numbers are high," Spectrem said. Only 38% do not use any of the social media sites.
Although Skype and other video chat capabilities are relatively new, Spectrem predicts they will soon be commonplace. "Advisors must determine how they will respond to this demand," Spectrem said.
"The rapid change in technology will not slow down. Financial providers must insure that they are competitive with the technological capabilities of their clients and prospects and not be playing catch-up. While older investors are still adapting to new technology, younger investors not only want these new features, but expect them from their financial providers," Spectrem concluded.
--Karen DeMasters