The number of investors who are using social media for a host of applications, among them personal finance and investing, has increased markedly in recent years, according to new research.
Market Strategies International discloses this finding in “Investor Touchpoints,” a Cogent Wealth Reports study on best practices for building an optimal investor communications strategy. The Web-based survey polled 4,000 U.S. adults with investable assets of $100,000 or more.
The report reveals that in December 2012 34 percent of investors used social media for personal finance and investing (PF&I) purposes. This compares with 30 percent in 2008.
The proportion of investors who turn to social media for non-PF&I applications increased markedly over the four-year period: 41 percent in 2012 versus 22 percent in 2008.
According to the report, usage of social media by gender, affluence level, generation and advisor break down as follows:
- 38 percent (men)
- 28 percent (women)
- 34 percent (emerging affluent)
- 34 percent (affluent & high net worth)
- 70 percent (Gen Y)
- 44 percent (Gen X)
- 25 percent (Baby Boomer or earlier)
- 34 percent (advised)
- 33 percent (not advised)
The report observes that top financial firms are marketing to investors through a variety of advertising methods, with a particular focus on television spots. However, the effectiveness of different ad types varies significantly.
“Gen Y investors are the most prone to take actions based on ad recall,” the report states. “These younger investors are more likely to conduct additional research, visit a firm’s website and call the firm directly as a result of seeing the ad.
“Not surprisingly, few investors report investing money with a firm after seeing an advertisement, suggesting that building brand engagement occurs with a mix of push and pull strategies, including email, website visits, speaking to company representatives, reviewing educational materials and financial advisor recommendations,” the report adds. “Older generations in particular require more direct outreach in order to positively influence their purchasing behavior.”