Investors continue to cozy up with blogs for investment advice. Kudos to Dominic Jones for uncovering a recent survey that shows young investors rely heavily upon the Internet to manage their portfolios. I’ve embedded the survey below.
The survey shows that:
- Turning to the Web: financial websites and blogs were the most influential external influences for both younger investors (49%) and those 40 and older (47%).
- More DIY investing: Almost half (49%) of those 40 to 65 have reduced or eliminated their reliance on financial professionals compared to 37% of investors aged 21 – 39.
- Parents can help: Almost one-third (30%) of the younger group say their parents had the biggest influence in getting them started investing.
Dominic’s take on the ING Direct ShareBuilder survey:
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.
It’s an interesting survey and worth reading. In the wake of reading it, I have a couple of points to make:
- Only ShareBuilder clients were surveyed, so the fact that these investors are using the Internet to conduct research shouldn’t be all that surprising. I’d be curious to see a Pew-like survey that addresses this issue. It’s like saying people who use Macs buy more on iTunes. [ed.: This original statement was incorrect. ING Direct clarified to me that the survey was of the general investing public. My bad. 3/24/2010]
- The survey makes the claim that investors are turning to the Internet at the cost of tapping professional advice. What’s happening here though is that much of the investment commentary/research we read online has been written by professionals. They’re writing this stuff with the hope (dream?) of landing some of the people who read it as clients. So, in fact, investors are consulting professionals and consuming profession advice — they’re just not paying for it directly.
