NEW YORK: A “significant” percentage of financial professionals are turning to social media for investment information as Wall Street experiences a generational shift, according to research from Marketwired.
While 60% to 70% of investors use traditional sources, such as press releases, newspapers, and analysts reports, to receive information about investments, four in ten are using social media as a source.
Marketwired interviewed 120 US financial professionals across different-size companies, as well as those who are self-employed.
It found that individuals who are financial or market analysts or work for large companies are most likely to use social media information.
Six in ten respondents who are under the age of 40 say they regularly use information from social media sources. Marketwired found that the under-40s surveyed are three times more likely than other groups (41-to-65 and 65-plus) to say the information they get from social media is credible.
The survey was conducted after the Securities and Exchange Commission released guidelines to allow companies to distribute corporate information through social media sites such as Facebook and Twitter.
More than half (53%) of respondents say the decision by the SEC will be beneficial for investors. This is most likely to be the case among stockbrokers and individuals working at larger companies.
Age also has an impact on financial professionals' perceptions about the SEC ruling, with the majority of investors under 40 saying it will be beneficial, but the majority of those older than 65 (67%) saying it will be harmful. The 41-to-65-year-old age group is more divided on the issue, with 51% seeing it as beneficial and 49% viewing it as harmful. According to the study, 80% of investors believe the recent ruling will result in more companies using social media to share information.
"While some traditional wire services may view the SEC's ruling as a disservice to investors, we disagree,” said Marketwired CEO Michael Nowlan. “And the data from this survey shows that Wall Street also believes the decisio will benefit investors.”
He added that Wall Street is experiencing a “generational shift.”
“The use of social media as an information source will continue to increase, underscoring the importance of an integrated approach to investor relations -- combining traditional and social channels," Nowlan explained.
The study also found that just less than half (49%) of respondents' companies block them from using social media sites such as Facebook and Twitter. However, 39% of respondents who are blocked from social media access at work use their personal devices, such as smartphones and tablets, to use the platforms.