There is a reason one of your first questions to a prospective client is “What do you do for a living?”
Occupational factors, trends, and biases affect investment strategies. It would be incorrect to think that senior corporate executives look at finances the same way a business owner does. The same is true about educators, doctors, lawyers and freelancers.
So advisors ask the question for a reason.
When the answer to the question “What do you do for a living?” is answered with the words “I am in information technology”, advisors should have bright lights go off in their head.
If there is an industry that is growing without limits, it is Information Technology. Thanks to the seemingly endless growth of companies like Microsoft, Apple and Amazon, as well as the continued interest in social media sites like Facebook and Twitter, IT professionals are in a growth career, and the growth is likely to extend to salary and benefits. Put simply, people in the IT industry are likely to be making good money, with more good money ahead of them.
This growth and its influence on the markets and the investment industry is why Spectrem created its new study Get Up To Speed with Information Technology, a look at the investment tendencies, social media and mobile technology usage, advisor relationships and portfolios of investors from the Information Technology industry. The study revealed significant differences between IT professionals and investors in other industries regarding investment strategies and outlooks.
The revelations from the study are numerous, but one clear insight is that investors from the IT industry are willing to do much of their own research and investments. Almost half of all IT investors consider themselves to be Self-Directed or Event-Driven investors with little involvement with advisors.
That does not mean advisors should ignore IT professionals. Instead, they should find ways to make themselves more attractive to that segment of investors and advertise themselves directly to IT investors in the publications and on the websites they frequent.
What might make an advisor seem more attractive to an IT professional? The answer lies in technology. Investors from the IT industry are interested in using their mobile devices as much as possible, and are also much more likely to be interested in using video technology to communicate. While video-chatting is not something a lot of investors do with their advisor, IT professionals find it to be useful for valid communication and see it as the best way to use their time wisely when they need to communicate “face-to-face” with their advisor.
IT professionals have a tendency to be younger than other investors on average, and they are also significantly more aggressive in investing. This is yet another reason IT investors could use an advisor; aggressiveness is only beneficial when it is properly directed, and advisors can certainly aim IT investors toward products and services which offer significant return on investment and are considered less likely to fail to do so.
Perhaps the greatest revelation from the study, and one that should cause advisors to take notice, is that people in the IT field currently are worth more than investors in other professional capacities. Any glance at the success of firms with a strong use of information technology can know that the people working in that industry are being paid handsomely to keep those companies technologically relevant. That’s why so many parents are asking that their children be taught computer and technological skills so that they can have an opportunity to succeed professionally when the time comes.
Investors from the Information Technology sector are numerous and affluent. They are also different from investors in other occupations. Advisors can provide better advice for these IT investors by knowing what those differences are.