Almost everyone is influenced by their family. Parents teach us important facts as we grow up, and for many people those parents remain key sources of information through a good portion of adulthood even into middle age.
Almost everyone is influenced by their friends. Whether they come from childhood or college or early adulthood, we all have someone we got to know and kept close for companionship and to serve as a sounding board for our most important decisions.
Almost everyone is influenced by professionals. Whether we talk to our doctors and dentists, or lawyers and accountants, we all have someone with an education beyond our own to help us making vital decisions. For investors, that professional is often a financial advisor, who knows more about investing than we do and can assist us in growing our portfolios.
But when all the people in our lives are busy or otherwise engaged, we have the media. We can read articles or blogs, listen to radio broadcasts, or watch television shows, and while much of that media is provided for entertainment, some of it is provided for intellectual stimulation, or to provide information we need to make vital decisions in our lives.
Spectrem decided to determine just how influential the media is in the lives of wealthy investors, and the results are available in the new whitepaper Media Influences on Investors.
Investors admit that the news media plays a role in their investment decision-making. When asked to set the influence of different factors on a 100-point scale, the news of the day finished third at 48.78, behind investment performance (70.79) and advisor recommendations (53.01). The advisor rating is not much higher than the news reporting, which should encourage advisors to determine who his or her clients are listening to, watching or reading to get their news updates.
Investors surveyed by Spectrem said the most popular media source of investment information is national television broadcasting (36 percent of investors chose that). However, for those people who prefer to read news rather than hear news, 32 percent prefer to get their news from newspapers. Almost one quarter (23 percent) are reading investment news in print magazines, and 12 percent read online magazines, which is often publications that once were actually printed but have transformed to just online.
There are other sources of financial information that are not very popular among wealthy investors, and many of them are modern forms of information dissemination that may not have caught on with a large audience yet. Only 15 percent of investors gather information from financial websites, and only 5 percent gather information from online blogs. Whether those percentages will grow over time is uncertain; not all online efforts succeed.
The research shows one other factor related to media influences on investors. It is discovered that the smarter the investor is about investing, the more likely that investor is to access information through national or local media sources. In considering every form of media available, those investors who self-describe as knowledgeable about investing are more likely to access those forms, compared to those investors who claim to be not very knowledgeable about the financial topics. Among the not very or not at all knowledgeable, media use is very limited.
If an advisor has a favored media source for information, one that advisor uses to acquire knowledge on current financial matters, it could be helpful to suggest that newsperson or news site to clients. It could create an easier communication path when both investor and advisor are on the same page in terms of the level of knowledge on current issues.
For those investors who do not know much about investing but want to gain knowledge, you can certainly point them to media sources that you trust so that you are not required to provide all of the education and background for your uninformed clients. Having them gain knowledge from outside sources would save you time, and in your business, time is definitely money.
©2019 Spectrem Group