The overall quality of social media activity among prevalent global wealth managers and private banks has “not improved noticeably” over the last year, according to new research from Swiss research firm MyPrivateBanking and published exclusively by this website today.

The average number of points achieved by the 30 benchmarked banks in this year’s report, Social Media for Wealth Management 2013: The Train is Leaving, is 18 out of 50, down from 27 in 2012 but up from 13 in 2010.

While MyPrivateBanking highlighted that it has tightened its evaluation criteria this year, the decline in the quality of social media usage may also be because many wealth managers and private banks have come to a standstill with their social media activities, it said.

The insights may come as a surprise at a time when the concept of social media seems to have embedded itself firmly in the wealth management space. But while there is a lot of noise being made about it, it seems that a considerable number of industry players are merely dipping their toes into the water.

For its research, the research firm looked at 30 wealth managers and private banks, looking at the quality of their social media presence on Facebook, Twitter, LinkedIn, YouTube and Google+. With a score of 40 out of 50, Barclays was crowned winner, followed by UK private bank Coutts (37); Wells Fargo (34); Pictet (33); and Merrill Lynch (30). 

Other entrants were: ABN AMRO, BNP Paribas, BNY Mellon, Charles Schwab, Citibank, Commerzbank, Credit Agricole, Credit Suisse, DBS Bank, Deutsche Bank, Goldman Sachs, HSBC, ING, Investec, Itau Private Bank, JP Morgan, Julius Bär, Morgan Stanley, Northern Trust, Royal Bank of Canada, Santander, Societe Generale, Standard Chartered, UBS and US Trust.

Stand-out qualities and drawbacks  

Besides being represented on all main social media channels, the report said the winners stand out by the additional social media features they offer. The Barclays Wealth Blog, for example, provides information on behavioural finance, while Coutts features several personalised Twitter streams of high-ranking staff, including the chief investment officer. Additionally, Barclays provides examples of social media activities on a personal level, which involves staff having their own presences, it said. Meanwhile, Wells Fargo was praised for having the best integration of social media presences.

“One main weakness that our analysts found was that, out of the 30 banks evaluated, only Barclays, Coutts, Pictet and Societe Generale have social media presences on all relevant social media networks, namely Facebook, LinkedIn, Twitter, YouTube and Google+,” the Swiss research firm said. The wealth managers examined scored, on average, a third of the possible points for their social media strategy; the report says the majority are ignoring many social networks, as well as failing to provide engaging content or frequent updates.

However, issues related to compliance and privacy/security are arguably the most important facing the wealth management industry today, which could help to explain the apparent lack of progress among firms when it comes to social media.

In the US, for example, the principal body making policies or issuing guidelines related to social media for firms in the financial services industry is FINRA – but this is more advice and guidance than legal pronouncements, Stacey Haefele, chief executive at HNW, Inc, has previously told this publication.

Haefele said firms in the financial services industry tend to be left to their own devices on how to interpret the latest guidelines, and it is up to individual firms to ascertain a policy, to offer training and education, and to ensure enforcement, oversight and archiving.

Although HNW, Inc - a marketing firm serving financial business - is US-based, Haefele's insights are relevant globally. Compliance workflow around how you manage, say, 10,000-15,000 individual publishers is complex and not just about technology, but business process. “It’s not insurmountable, but it can be very taxing and time consuming to do it properly,” she said.

Ultimately, it boils down to this: because wealthy clients are increasingly active on social media, their advisors ought to be, too, says Steffen Binder, research director of MyPrivateBanking.

“A social media relationship between a client and his or her advisor - who will know and have befriended each other in the offline world, too - is much more valuable than the client ‘liking’ or ‘following’ the central, corporate social media activities of a bank,” Binder said. “In the end, this is the business case for social media engagement: new client relationships and increased assets under management through constant interaction with existing and potential clients.”