A SURVEY has found that financial websites and blogs are the top influences on U.S. individual investors, while those under age 40 are more heavily influenced by family, friends and work colleagues than are older investors.
The findings reinforce the importance of the web in shaping investors’ investment decisions and highlight the potential for information shared between friends on social networks to become strategically important to investor relations professionals. Meanwhile, the influence of financial advisors is waning.
Conducted online from January 7 to 19, 2010 by Harris Interactive, the study surveyed 1,021 general investors between the ages of 21 and 65, and 912 ING Direct ShareBuilder customers within the same age groups.
Web and social networks key influences
The study found that younger investors, defined as those aged 21 to 39, differ from their older counterparts in that they are far more likely to rely on family (40% v. 19%), friends (27% v. 14%) and work colleagues (17% v. 6%).
Given that many investors today rely on online social networks like Facebook to stay in touch with friends and family, the potential of recommendations via social networks to influence investor actions appears to be growing.
The study also found that financial websites and blogs were the most influential external influences for both younger investors (49%) and those age 40 and older (47%). Financial print publications ranked second with both groups.
Increased self-reliance and dwindling influence of financial professionals
Meanwhile, younger investors are much less likely to rely on advice from financial professionals than their older counterparts.
Only 35% of younger investors said they were currently using a financial planner compared to 39% of older investors. When it came using brokers, however, only 18% of younger investors said they use them compared to 36% of those over 40.
The study’s authors say the “losses they incurred in 2008/2009 and the questionable practices of some financial institutions have caused investors to re-evaluate their reliance on financial advisors and brokers for investing advice.”
Fully 45% of U.S. investors say they have reduced or stopped using financial professionals for investing advice. Older investors are leading this trend, says the study, with almost half (49%) of those over 40 having cut or halted their reliance compared to 37% of younger investors
A whitepaper on the study is embedded below
Harris ShareBuilder Study of Individual Investors
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That's an interesting study. Unfortunate though that blogs are linked in with financial websites. While in some cases the two might be very similar they are really two distinct areas for research.
Financial websites and blogs most influential with individual investors, study finds, http://bit.ly/aW7ml1 by @irwebreport
I agree. Even though it can be difficult for people to tell a website apart from a blog, it would have been helpful if they'd broken them down more. I'd also like to know more about the kinds of websites used, e.g. broker websites, investor portals or social investor sites.
one point here: interesting that investors say that they tap professional advice less and less. Much of the stuff online that they're using to guide them was written by professionals. So, in fact, they are using professional advice — they're just not paying directly for it. Would be curious to see what role premium newsletters play…
to further NRofI's point, the survey is biased b/c half of those surveyed (ing sharebuilder members) are already not using brokerage advice…of course their answers are going to validate the current strategy of not using brokers or anybody else for their advice. might as well survey 1000 morgan stanley or boa brokerage clients b/c you'd get the exact opposite answers as the ing sharebuilder users.
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As a former Financial Adviser the only surprise is that it has taken so long for the penny to drop ie for investors to realize that there are no " experts" out there that they can/should rely on.
Almost everyone in the financial world ( I am speaking here as one who has spent a lifetime in it) has a vested interest in the advice they give/ information they distribute in other words what you read and hear is heavily biased and sometimes not intentionally.
The answer is to read as much financial history as possible, read also fresh thinkers like Taleb and always be cynical that way you might survive the next crisis which will almost certainly be worse than the present one
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RT @Fara_SA: RT @irwebreport Study finds financial websites and blogs r most influential external source for investors! http://bit.ly/b2uJw3
always leading edge posts. thx man.
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