Investors turn to social media for advice

It’s changed the way people communicate with friends and family; it’s altered the way businesses conduct themselves; and social media is now also influencing the way people invest.

Almost one-third of 1000 individuals aged 18 to 65 surveyed by investor communications firm Interactive Investor and research company Nine Rewards in March used some form of social media to research their investments. This is true of about half the respondents aged 18 to 24.

“The survey provides strong evidence that investors – particularly the younger breed of investors – are adopting new approaches when making their decisions,” Interactive Investor’s managing director, Susan Werkner, says.

More than half of all respondents use Google as their search engine and more use company websites as a research tool.

“For listed companies to reach their audience, they have to adopt a greater willingness to embrace digital channels, particularly social media, as a means of disseminating information,” Werkner says. “Email remains the preferred means of communication, but social media in the form of Facebook, Twitter, blogs, forums, videos, podcasts and even mobile apps are becoming popular, particularly among younger investors.”

The survey also found that men are four times more likely than women to rely on their own research or knowledge when making investment decisions. “Irrespective of gender, communication is critical for all investors,” Werkner says.

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