WEALTHY investors are turning to sites such as Twitter and Facebook for advice on where to put their money while shunning traditional advisers, according to new figures.
Research seen by City A.M. claims that around two-thirds of well-heeled Brits who use social media to view financial information have made an investment based on what they have seen. The study, from the professional social network LinkedIn, surveyed hundreds of people who fit into the so-called mass affluent class – those with between £65,000 and £650,000 of assets such as savings and shares.
LinkedIn said activity had picked up in the wake of the retail distribution review, which banned the payment of commission to financial advisers when it came into force at the end of last year. It said 63 per cent of the mass affluent who use social media to browse financial information are driven to make an investment decision as a result.
Social media has been identified by some as a key indicator of financial sentiment. British entrepreneurs at DCM Capital launched the world’s first trading platform based on information gleaned from Twitter and Facebook in January, claiming that 88 per cent of the time, social media predicts whether the Dow Jones will rise or fall on any given day.
Oli Freeling-Wilkinson, the chief executive of Knowsis, a trading analytics firm which tracks social media, said: “The markets are beginning to open their eyes to the potential in the vast quantity of data produced by social media.”