Mutual funds looking for new and more effective ways to interact with their Baby Boomer clients-or find new ones-should be inspired by a new Pew Research Center report that found social networking participation among this highly coveted group surged more than 60% in the past year.
The survey of more than 2,200 adults conducted between April 26 and May 22, found that 32% of Internet users between the ages of 50 and 64 are now using a social networking site such as Facebook, LinkedIn or Twitter on a daily basis-up from just 20% at this same time last year.
For asset management companies that have thus far been reluctant to establish a meaningful online presence, the data suggests the time has come to get serious about developing a social media strategy that conforms with current regulatory guidelines and differentiates each advisor and firm from its competitors.
A recent survey by social middleware developer Socialware found that while 60% of financial advisors, for example, are already engaging in some form of social media activities, most are still only in the initial stages of developing a comprehensive and sustainable social networking program.
The Pew Research Center report also makes it abundantly clear that social networks are one of, if not the, preferred medium for gathering and sharing information, particularly when it comes to vetting professional services providers.
The survey found that 65% of all adults use a social networking site on a daily basis, up from 61% last year. It's also the first time in Pew Internet surveys that social networking participation among all adults eclipsed the 50% threshold.
"The graying of social networking sites continues, but the oldest users are still far less likely to be making regular use of these tools," said Mary Madden, senior research specialist and co-author of the report. "While seniors are testing the waters, many Baby Boomers are beginning to make a trip to the social media pool part of their daily routine." And don't forget about the youngsters. FTI Consulting estimates by 2018 Gen Y will become the wealthiest generation in U.S. history with a combined annual income of more than $3.4 trillion.
Steve Garmhausen and Larry Barrett write for Financial Planning.