Wealth managers must exploit social media to increase their ability to keep clients, a new study says, adding fuel to debate about the usefulness of such technologies.

Wealth managers who have embraced social media will increase “client stickiness,” while those who ignore it could risk losing relevance, says a new report from Boston-based consultant Celent.

Although the adoption of social media among wealth management firms is at early stages, financial services firms have recognised its relevance as a customer interaction channel , said the report. Investing in client communication tools has become a priority, and social media is a channel that many players are engaging with, according to Celent’s new report Social Media in Wealth Management.

“The crisis of 2008 and the economic recession following it affected the perception investors have about wealth managers and financial services providers, leading to lower levels of trust. Therefore firms have to be more proactive and dynamic with their customer interactions, with social media being one of the key new age media channels,” said co-author and research director at Celent, Isabella Fonseca, in a statement.

“The use of social media among wealth managers provides an opportunity to increase client communication, add ‘touchpoints’, and increase client stickiness. Furthermore, social media tools give wealth managers new modes for prospecting and measuring influence,” said Fonseca. She warned that wealth managers who have not taken the initial steps in developing a social media strategy run the risk of losing their relevance.

“Social media technology sales are initiated by a firm’s marketing departments in most cases, while the compliance departments participate to ensure regulatory compliance,” said Sreekrishna Sankar, Celent analyst and co-author of the report.

“The current crop of solutions is provided mainly by generic vendors that focus on compliance issues and enable archiving and audits for wealth managers and retail brokerages. But we are seeing the emergence of specific solutions focused on social media requirements for wealth management firms.”