Who are your clients & prospects listening to for financial advice? You may be surprised.
As we sit here today, financial advice and guidance are being consumed in new and exciting ways. Gone are the days of solely relying on traditional sources and professionals for investment information.
Nowadays, investors have a smorgasbord of options at their fingertips. Whether it’s scrolling through social media feeds, checking out mobile apps, or exploring online resources, people are finding diverse avenues to make financial decisions. To be effective advisors, it’s crucial to understand how these modern investors are getting their fix and adapt our strategies accordingly. We need to keep up with the times, embrace technology, and meet our clients where they are.
Betterment recently launched their 2023 Retail Investment Survey that reveals just how investors are changing the game and embracing new methods of financial advice. Here are a few key points to consider:
Generational Differences in Media Consumption
The survey revealed distinct generational disparities in media preferences among investors. Millennials emerged as the group most likely to turn to social media platforms for financial news, surpassing even their digitally native Gen Z counterparts (43% vs. 38%). Gen X trailed behind at 30%, while only 10% of Baby Boomers reported using social media as a source of financial information.
Trustworthiness of Sources: Financial Advisors Lead the Way
When it comes to trust, financial advisors were ranked as the most reliable source across all generations. 63% of respondents ranked them in their top three trusted sources. Print publications and TV shows followed behind, earning the trust of 47% and 45% of respondents. Personal relationships also played a significant role for investors as it has the trust of 46% of investors.
Social Media: Trust and Influence
Social media managed to attract advice-seeking investors, with 39% reporting taking financial guidance from these platforms and 70% of respondents that felt social media’s coverage addressed their needs. A surprising finding was that investors with financial advisors were more likely to seek advice from social media influencers (58%) compared to those without advisors (15%). Gen Z and Millennials were the most likely to turn to social media for financial advice, with 65% and 55% respectively, while only 31% of Gen X and 4% of Baby Boomers relied on these platforms.
The Influence of YouTube and Success Rates
Among social media platforms, YouTube emerged as the top source for financial advice, preferred by 64% of respondents. Intriguingly, despite social media’s low trust ranking, 87% of investors who followed advice from these platforms reported positive outcomes for their financial moves. Only a mere 1% claimed negative results, with the remaining 11% perceiving no significant impact.
As the digital landscape continues to evolve, investors’ preferences for accessing financial news and advice have shifted. While TV and online media publications remain popular, social media platforms are gaining traction, particularly among younger generations.
Trust in financial advisors remains strong, but the influence of social media influencers cannot be overlooked. The apparent contradictions in trust levels and successful outcomes from social media advice warrant further exploration as investors navigate the ever-expanding media landscape.