Monday, November 7, 2016 Stamford, CT USA — Approximately one-third of asset management firms in the United States do not have a social media marketing strategy.

That is one of the key findings of a new study from Greenwich Associates and PAICR, the asset management marketing association, in which 71 asset management senior marketing executives in the U.S. were interviewed about their firms’ usage of social media marketing.

The proliferation of social media cuts across all areas of our personal and business lives and the asset management industry is no exception.  Asset management professionals today use social media to engage with peers and colleagues, to screen interview candidates, to research sales leads, to learn from industry leaders, and even as a source of alpha for certain investment strategies. 

Given those usage patterns, it is surprising to find that 32% of the firms participating in the study have no social media marketing strategy. “It is no longer sufficient for asset management companies to limit their marketing channels to traditional media,” says Dan Connell, head of Greenwich Associates Market Structure and Technology Practice and co-author of a new report Asset Managers Investing in Social Media Marketing. “If asset management companies do not develop their brand and connect with customers on social media, they risk losing out to competitors who do.”

Only 38% of asset managers use paid (or sponsored) advertising on social media, with the majority of firms relying on “organic” postings to social media sites. “If asset management firms are serious about leveraging social media to increase brand awareness and drive sales leads and awareness, they need to formulate a sponsored advertising strategy across multiple social media platforms to enable them to direct content to specific demographics,” says Richard Johnson, Vice President Market Structure and Technology at Greenwich Associates and co-author of the new report.

Compliance and regulatory concerns are the main reasons given for not engaging on social media, followed by a lack of buy-in from senior management. The report concludes that social media companies need to work with the financial services industry to provide better metrics to measure ROI and help asset managers manage their compliance obligations.