Social media: the final frontier for professional investors?

In global asset management, an industry driven by analytical and rational professionals, it is still surprising to see how many senior leaders question whether social media is a channel worth considering when targeting professional buyers and investors.What if the same analytical mindset could be applied to understanding the role of social media in global sales, distribution and marketing?

Informed decision making

Simply being able to access a research database containing a wealth of information about investor preferences and the role social media plays in their purchasing behaviour would provide senior leaders with the insights they are seeking; how and when are investors using their mobile phones, what is the extent of professional social media usage and what do they use it for? And finally, do professional investors prefer reading the content from asset managers on their desktops, mobile device or both?

This is vital information for tailoring distribution and marketing to meet the needs and wants of the professional investor.

Fund selectors have embraced social media

In our research among discretionary portfolio managers and fund selectors*, we looked at the usage of social media and investigated their reasons for using the medium.

The chart below compares professional usage of leading social media sites across key European markets in 2018 vs 2016 along with the devices used to access them (desktop, mobile, both).

Across the board we can conclude that social media has become indispensable for engaging professional investors at large. While the overall growth in usage is consistent across the United Kingdom, France, Germany, Spain, and Switzerland, there are some significant differences between individual countries. It is essential that any country-specific distribution strategy and tactical plan is mindful of these differences, as one size doesn't fit all!

From our previous research conducted in 2016 to our latest research in 2018, the usage of LinkedIn has shown significant growth; it has practically doubled from 43% to 85% in just two years.

In the German-speaking markets usage of Xing is popular. Xing is LinkedIn's key competitor in Switzerland and in the case of Germany, usage even out-paces it as the leading platform for professional investors.

However, this doesn't tell the whole story. Xing is very much a national medium and professionals with an international outlook have both Xing and LinkedIn accounts. Recent anecdotal evidence seems to suggest that people are closing down their Xing accounts or linking their Xing account through to LinkedIn accounts. We expect the importance of Xing among fund selectors to diminish over time.

Across these key asset management distribution markets we can see that professional investors have truly discovered social media. 

Social Media mainly used to consume content and to connect with peers

While professional investors also use social media for publishing content, marketing their business and contacting clients, their key motivation for using it is the opportunity to interact with asset managers and their peers whilst keeping up to date with industry developments.The top three reasons for usage are:

The top three reasons for usage are: 

A. Networking with peers,  

B. Reading up on industry news and  

C. Reading content from asset managers. 

Professional investors clearly use social media to get informed about asset managers, their content and their offering. Therefore, it's a 'must' for asset managers to leverage these platforms to drive customer engagement.

Our research also shows that the use of mobile devices has reached an all-time high in European asset management. The majority of social media content is being consumed through either mobile phones or a combination of mobile phones and desktops. It is imperative that content is designed to accommodate all these devices. We are still seeing examples where asset managers are struggling with implementing responsive design and are continuing to use website formats that do not communicate well on mobile devices. It's essential the entire asset management industry keeps apace as consumers become spoilt by the engaging experiences offered by online retailers and in the B2C space. Asset managers should jump on board if they don't want to lose the attention of investors!

Social media is here to stay

The trends highlighted in our research lead us to believe that professional buyers and investors have embraced the role of modern technology in their day-to-day lives, both personally and professionally. The strong growth of social media usage among professional buyers and investors in these key European markets underpins these findings. To ensure they are not left behind it is essential that asset managers keep apace of these developments and take the role of these platforms and channels seriously.

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