High-net-worth investors are integrating media devices, social media and social networking into their lives more than ever before, according to a new survey from the
IPI is an exclusive club of about 1,100 private investors and 140 professional firms from 18 countries, with four out of five member families overseeing assets of $50 million or more. The member survey, conducted in May, found that 38% of respondents said they actively participate in social media, such as
“Members will post questions such as, ‘My broker offered me an opportunity for this particular fund or that particular IPO’ and ask other investors if they have any knowledge of the investment,” says Kuechler. “They are not allowed to make recommendations, but a member might ask if others have had experiences with a particular adviser. Sometimes another member might offer to talk by phone, and they have a truly candid conversation.”
Whether such forums actually expose bad practices and force greater transparency in the wealth management industry might be debatable, but as a community of highly influential investors, IPI has brought its members together both online and at face-to-face meetings and seminars to talk about wealth managers, naming names and discussing the fees and commissions they pay. Kuechler recalls a recent seminar at which one member told another he thought his adviser’s fee was too high. “The member went to his adviser and got him to reduce the fee,” she says.
Even in the secretive world of private equity and venture capital, private investors are using social networks, according to findings reported by David Teten and Chris Farmer in the June issue of the
Retail investors are using social media more to obtain financial information and investment strategy advice than to seek information about advisors, according to another survey, released by
The Spectrem study, “Social Media and the Investor” is based on a survey of 500 financial decision-makers in households with $50,000 or more in annual income who spend at least two hours per week on the internet including at least one hour devoted to financial pursuits. Among Spectrem’s conclusions: LinkedIn seems to be the most viable target for wealth managers seeking to build their own social networks. Seventy three percent of those who use LinkedIn would consider joining groups to discuss economic and investment topics.
“A wonderful way to for a use this would be to create a client group on LinkedIn,” says George H. Walper, Jr., president of Spectrem Group. “In the future, there will be more online financial communities, and this is a good way for an adviser to be forward-thinking.”