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Investors using social media to glean investment advice, study shows

It would seem that lots of people are actually using the blogosphere and social media sites for investment…

It would seem that lots of people are actually using the blogosphere and social media sites for investment advice.

Spectrem Group, a research and consulting firm in Chicago is out with the results of a survey and a new report showing that social media networks have become an important stop for investment information for all age groups.

Probably of most direct significance to financial advisers: More than one-third (36%) of investors say they are interested in receiving information from their advisers or corresponding with them through social media — for investors under age 35, this rises to 53%!

Among their other results: 77% of investors who read blogs are likely to consult them for information on new financial products and services, 69% of LinkedIn users are likely to consult their LinkedIn networks on investment issues and 63% of Twitter users would pay attention to investment tweets. Nearly half (46%) of YouTube users and 41% of Facebook users would seek investment information from these forums. Social media networks are also popular sources for developing new investment strategies and seeking buy/sell advice.

Spectrem surveyed “500 financial decision-makers in households with $50,000 or more in annual income who spend at least two hours per week on the Internet,” according to a press release, and at least one hour of respondents’ online time per week is devoted to financial pursuits.

They report their data has a margin of error of plus or minus 4.3 percentage points.

“Investors familiar with social media are tapping into blogs, LinkedIn, Twitter, YouTube and Facebook to inform their financial decisions. While this is especially true for younger investors, older individuals are becoming increasingly comfortable with social media as well. For advisors and financial services providers, this means a social media presence and the use of social media tools for communications have become a virtual necessity,” said George H. Walper, Jr., President of Spectrem Group.

The report is entitled “Social Media and the Investor,” and is listed on the site for $3,800.
For more information visit Spectrem Group.