Social media influences 70% of investors for their personal finance and investing decisions, reflecting the importance of a strong social media strategy for fund distributors and asset managers.
According to a report conducted by Cogent Research (@cogentresearch) based on a survey of over 4,000 investors with more than $100,000 investible assets, 34% of affluent investors use social networking sites such as Twitter, YouTube, Facebook, LinkedIn, and company blogs for personal finance and investing (PF&I) purposes.
Investors who use social media for PF&I purposes use various platforms in forming first impressions about providers and seeking advice on investment decisions, in addition to conducting researches on products, companies, and investing.
According to Remy Domler Morrison, co-author and Project Director of the report, social media motivates investors to engage more with their investment firm representatives and advisors, leading to more asset gathering opportunities for providers.
However, the investors’ use of social media for PF&I have both positive and negative impacts for financial companies. While it increases the opportunity to develop relationships and trust, it also presents the risk of negative feedback.
Tony Ferreira, Managing Director of Cogent Research, said that positive comment and favourable investment decisions come with the possibility of damaging the content, but the larger risk is on ignoring the negative comments.
- Social media influences 70% of investors for personal finance and investing
- 34% of the over 4,000 investors with $100,000 investible assets use social media for PF&I purposes
Top 10 Brands with the Highest Positive to Negative Impressions Ratio via Social Media
- Fidelity Investments (@Fidelity)
- ING (@ING_USA)
- Vanguard (@Vanguard_Group)
- USAA (@usaa)
- Charles Schwab (@CharlesSchwab)
- John Hancock (@JohnHancockJobs)
- American Funds
- Wells Fargo (@WellsFargo)
- T. Rowe Price (@TRowePrice)
- Janus (@JanusCapital)
Remy Domler Morrison, Cogent Research Project Director and co-author of the report: “Today’s investors’ are scrutinizing ‘traditional’ sources with content and commentary they are finding through social networks, and are becoming much more critical and conversant when it comes to their investment choices.”
Tony Ferreira, Cogent Research Managing Director: “For every positive comment and favourable investment decision comes the possibility for damaging content. However, the larger risk to a firm is ignoring negative comments that may already exist.”
Covered by my Visible Banking Team
Do you agree that social media now has a significant amount of influence on private investors? Is your financial institution equipped to connect, engage and empower those investors on digital channels like twitter, linkedin, youtube or even facebook? And as an investor, are you planning to do some social media research before making your next important investment decision?