Three-quarters of affluent U.S. investors regularly use some form of social media, whereas only 52% did in in 2008, according to a recent study by Cogent Research. It’s a significant jump. Cogent’s study posits that the use of social media among the affluent will likely rise as Gen X and Y folks make up a greater proportion of affluent investors. This trend, the firm says, could alter the relationships some clients have with their advisors.
The study, Social Media’s Impact On Personal Finance And Investing, polled 4,000 adults with at least $100,000 in investable assets. One of the findings was that 44% of Gen X and 70% of Gen Y investors use social media specifically for personal finance and investing purposes. Cogent says this trend “brings out the well-rounded researcher” in investors. They are increasing their reliance on traditional sources of investment advice—such as financial advisors and news articles—but also increasingly scrutinizing these sources with information and commentary they share on social media networks.
The potential impact from this is considerable, Cogent says. According to the study, roughly 70% of investors have reallocated investments—or begun or altered relationships with investment providers or other financial firms—because of content they found on social media. The upshot: Advisory firms need a strong social media strategy to engage the growing number of plugged-in investors.