Birds of a feather

Type ‘private client’ into Twitter and you can see that the conversation is alive. There are comments on wealth structuring, trust and estate planning, and family governance. Much of this is generated by the accounts of firms that service the sector such as private client lawyers, accountants and private banks.

Indeed, at the time of writing, the private client team at law firm Burges Salmon (@BurgesSalmon) has tweeted about the Swiss tax agreement, Turcan Connell (@TurcanConnell) has posted a vacancy and Morgan Cole (@MorganColeLLP) is discussing David Cameron’s support of small businesses.

Such tweeting is not limited to law firms and the wider wealth sector is in on the game. Coutts Private Bank (@CouttsandCo), for example, is a keen Twitter user with 11,000 followers and Barclays Wealth (@barclayswealth) has more than 27,000. News outlets and specialist press, including Private Client Adviser (@pca_legal), also have accounts.

Of course this trend does not mean that all private client firms are now tweeting 24/7 with gay abandon. Many still do not have their own accounts and remain sceptical. Are they missing out on engaging with the industry and, notably, clients?

According to wealth researchers, the answer increasingly appears to be yes, if they are seeking up-and-coming wealthy clients. In a study by MyPrivateBanking Research, managing director Steffen Binder described social media’s development in the wealth sector as a “digital revolution”.

It found client demand was the most important driver behind this revolution, a lot of it being down to simple demographics. The next tranche of high net worth clients – especially entrepreneurs – are reliant on electronic communications, imbued with social media culture and never without a mobile device.

So while these clients may still value traditional meetings and calls, they also “demand that they can communicate with their advisers through digital media”, says Binder. One route is via Twitter and LinkedIn.

MyPrivateBanking Research also found the need to communicate with b2b stakeholder groups such as analysts, private client lawyers, private bankers, journalists and job applicants is also driving social communications.

“If you want to make sure that your brand message and your corporate communications reach these stakeholder groups you have to make sure that you are using digital platforms,” Binder says, adding that fully leveraging new technologies is a particular consideration for the “bigger, more global players wanting to be perceived as a modern, technology-affiliated brand”.

Corporate resistance

But the hesitancy of some companies suggests they are more alive to the risks than the benefits, according to the research. Resource is an issue. One firm serving UHNW clients was shocked that social media would require investing significant time in managing such accounts.

Historically, smaller firms in the private wealth sector seeking clients have been more focused on business development than corporate communications, which has meant placing value on knocking on doors and organising sales seminars, not sending tweets and invites to connect.

There are also privacy and business risks. One firm’s primary worry was that if it set up a Twitter account, its clients would follow, unwittingly giving away information to competitors.As Sandy Loder from consultancy AH Loder Advisers says: “The problem with Twitter is that you also get followed by people who are like you: your competitors.”

But the mounting evidence that client engagement will convince the doubters is echoed by Seb Dovey of wealth researchers Scorpio Partnership. His Futurewealth Project, was based on the views of more than 3,000 of the world’s up-and-coming wealthy and found that 29 per cent use Twitter while 31 per cent are on LinkedIn.

Shayne Nelson, CEO of Standard Chartered Private Bank, is also a digital convert. “The uptake of digital channels among high net worth clients and the increasing influence of these channels on decision-making cannot be ignored,” he says.

So those firms seeking new clients but not yet fully convinced may be best placed to keep Twitter under review. One way of doing this is to dip your toe in the water with a ‘reactive’ account, which exists but has not issued any tweets. It does not even have to be in the company name. These accounts are for monitoring what is being said about the firm, its competitors and the market without committing to regular activity.

However, it is worth remembering that people tweet, not companies. This means that owners and employees will be on Twitter in a personal capacity, even if they don’t identify themselves as such.

After one meeting with a single family office (SFO), I was invited to connect on Twitter by the CIO. The account showed no outward sign of being associated with an SFO and if I had searched for the account looking for any connection I would not have found it.

Chain reaction

LinkedIn, by contrast, has always been a popular way for professionals to engage, especially in b2b. There are a variety of specialist groups of interest to private client professionals including ones about trusts and estates, family business and family offices.

You can find these focused networks easily using the search function under the groups heading. But be mindful as some are dominated by professionals seeking to sell and they can suffer from a lack of group management, meaning that, at worst, the discussions are sometimes little more than adverts.

Nevertheless, there is massive potential in such fora, if properly moderated, as they attract advisers and families from around the globe. Socially aware advisers are keen to demonstrate their knowledge by offering value-added answers to the queries raised, giving rise to the idea that such LinkedIn groups may develop into virtual advisory hubs, where families and advisers discuss professional issues, and find sector-and country-specific experts.

Remember, though, that if you are posting a ‘discussion’ on LinkedIn, it is intended to prompt debate, and as such should probably be formulated as a question rather than a statement. A discussion that begins “Does anyone have any experience of…?” is likely to generate more genuine engagement than a dry statement about the latest award your firm has won.

As for making connections on LinkedIn, some sceptics fear that these can be plundered by rivals, but customising your privacy settings will ensure that only you can view your contacts. What’s true is that many firms have not yet tapped into the potential value of their staff’s LinkedIn contacts.

One of the most successful ways of doing this is to be proactive about your connections. If someone seeks to connect with you and you think they may be of value, you can follow up the connection by outlining what your business does and suggest they meet you if they think there are synergies. This may sound obvious, but too many people simply connect and forget, placing worth on the number of connections rather than the depth.

And if your firm posts LinkedIn updates on its corporate page, all staff should be encouraged to share these with their business-related contacts simply by ‘sharing’ the updates from their own profile.

Some firms will want to lay claim to the LinkedIn contacts made during business hours and others will want to strike a balance that encourages employees to keep on making contacts, even in their spare time. The legal ownership of these contacts, and any associated groups, needs to be clarified in social media policies and to take account of recent court judgments.

Rules of engagement

Social media guidelines can also help lay the ground rules for posting activity, although these are usually better received if they are written in a way that stresses the benefits as well as the dangers; more ‘how to’ than ‘thou shalt not’.

Of course the dangers are real but they can be overblown. The media tend to focus on the high-profile gaffes, especially on Twitter, when in reality the vast majority of faux pas are forgotten almost instantly unless you are a very high-profile individual.

It will be interesting to review the development of private client services on Twitter in another six months. Accounts are always popping
up and follower numbers increasing. On LinkedIn, private client advisers in particular benefit from engaging in properly managed groups where discussions are intermediated and if they take a little time to chase up important connections.

One thing is for sure, social media does not stand still and neither will your competitors and clients.

Keith Johnston is director of consultancy Private Wealth Communications

Top 10 tips for using Twitter here