Social Media Is Making Advisors’ Jobs Harder
Digital media is having an impact on advisors and making it more difficult to provide financial advice.
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In case we needed another reason to stop doom-scrolling.
Financial advisors are being influenced by social media posts about the markets, and that’s making it harder for them to do their jobs. Almost every single wealth manager in a recent survey said they are influenced by social media activity, and more than eight in 10 said they are becoming more impacted everyday. Four advisors in the entire survey of 100 European wealth advisors, managing $1.5 trillion in assets overseas, said they aren’t particularly influenced by social media activity. And just one advisor said social media wasn’t an influence at all (but, we’re calling bluff).
“Through social media, advisors and their clients are being bombarded with investment related news,” the creator of the survey, Ortec Finance, told The Daily Upside. “It increases the temptation for them to make rash, immediate investment related decisions, which may not be in the best interests to achieve their goals.”
Social Media-ocrity
Investors, and especially younger generations, are increasingly turning to social media as their source of information for everything under the sun — and that includes as a not-so-trustworthy source for financial advice. Gen Z investors cited finfluencers as a major factor in their investment decisions, according to recent research from the CFA Institute. Digital-savvy content creators generally have better engagement with young investors, and are often seen as more relatable than traditional financial advisors, the research found.
The report also found that only two in 10 finfluencers included disclosure — like potential conflicts of interest or if they could stand to make money by promoting certain stocks.
Blame fintwit: The overwhelming majority of advisors also said social media is making it harder for them to give professional advice to clients because of how clients react to all the noise.
“Social media is having a negative impact on many financial advisors and wealth managers themselves as well as hampering their ability to give sound professional advice to clients,” Ortec Finance said.
