Institutional investors are using social media to gather information that guides their investment decisions, according to a new report Greenwich Associates, titled “Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process.” The findings come from a survey of 256 major investors including corporate and public pension funds, insurance companies, endowments and foundations worldwide. These organizations were responsible for investment funds ranging in size from under $250 million to over $10 billion.
Greenwich found that roughly four out of five institutional investors use social media for work, while three out of ten said the information they gathered via social media had “directly influenced an investment decision.”
Additionally, 48% of investors surveyed said information from social media had prompted further research, 37% said they had shared information gathered from social media with key execs in their organization, and 34% had decided to work with a client or company based on information from social media. Last but not least, 33% said they had talked to an investment consultant because of something they saw on social media.
Looking ahead, study author Can Connell stated: “With approximately 40% of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”Last year a survey of 614 financial advisors by the Principal Financial Group found that half were using social media for professional purposes, with 25% using it to communicate with existing clients, and 23% to help find new clients. Less experienced financial advisors -- meaning advisors with less than ten years of experience -- were more likely to use social media primarily to find new clients, at 46% versus 20% for more experienced peers.