Where Did You Hear That?
In 2022 information is accessible everywhere you look. Access to information on any topic is within a simple online search through a computer or phone. This immediate access to information and broad depth of places an investor can go for information expands the sources used for obtaining investment data. Some investors do not use any source for investment information because they are not interested in that topic, but for those investors who are seeking investment information, the sources are broad and used differently, especially by different age groups.
Over half of wealthy investors use their primary financial advisor for investment information, according to research from Spectrem Group. This is not surprising, as a primary financial advisor is often the foremost expert a wealthy investor would interact with if they have an advisor. Millennials and Gen X investors are far less likely to use a primary financial advisor for investment information however, with only 27 percent of Millennials and 36 percent of Gen X indicating they use their primary financial advisor for investment information.
Another common source for investment information, or any information for that matter, is network news. Thirty-six percent of investors use network news to obtain investment information. The percentage of investors that use these news outlets is highest among Millennials, and lowest among WWII investors. Investors need to exercise caution when using network news for investment information, as the opinions expressed on many of these broadcasts may not apply to their specific situation. Some information broadcasted regarding companies and health of specific investment segments is also up to interpretation and need to be used with caution.
Investors also seek out information from friends and family regarding investment information. Sixteen percent of investors use their friends and family for getting investment information. Investors should be cautious with this source of information as well. Friends and family may not have the same risk tolerance or financial objectives as the investor and may result in suggesting investments or strategies that are not practical or appropriate for the investor. Millennials and Gen X investors are more likely to use friends and family to obtain investment information than older investors.
A few other sources of investment information that Millennials and Gen X investors are more likely to use than older investors are; social media, podcasts, webinars, and Reddit. Social media is more commonly used by younger investors, so it is not surprising that they are more likely to use social media for investment information. Usage of social media, including the social media platform Reddit, is not high however, even among younger investors. Twenty-two percent of Millennials use webinars to obtain investment information. This age group is more likely to use YouTube and consume information, so it is not surprising that this platform would also be utilized for investment information. Podcasts are used by 19 percent of Millennials and 10 percent of Gen X investors.
The sources of information used for investing should be considered carefully, as information can be misrepresented, not properly applied, or be incorrect. Investors would benefit from discussing any investment information they receive from other sources with their primary financial advisor to ensure the information is suitable for their unique situation.