Most of us use Facebook and Twitter for recreational purposes but many rich investors turn to these social media platforms for personal finance advice.

A survey by Global X Funds shows that most wealthy investors get personal finance advice from social media

The Survey

You probably thought wealthy people only rely on their expensive personal financial advisers for investment advice – and the only reason you’ll never be able to become a millionaire is because you can’t afford one for yourself.

Surprisingly, successful investors have a lot of habits in common with you, including the fact that they use just as much social media as you do. In fact platforms like Facebook and Twitter is where they accumulate most of the information about the companies they want to invest in.

According to Global X Funds new survey, wealthy investors are likely to use social media and other financial gadgets, in lieu of their personal financial advisors, to stay up to date with the latest market trends. The New York-based exchange-traded fund included more than a thousand wealthy investors in its survey. All participants had over $100,000 in their bank accounts whereas around 200 of them were millionaire with an investing power of over $5,000,000.

The survey showed that almost 51 per cent of the people who used the services of financial advisers also use online financial tools and apps regularly to gain more insight on companies they want to invest in. In comparison, investors who didn’t seek investment advice from a professional were far less likely to use technology as a financial tool; only 32 per cent of them admitted to using some kind of an app to learn more about the markets on a weekly basis.

How Social Media Helps Investors

So how exactly do investors find useful finance information on platforms like Facebook and Twitter? They say that instead of spending time scrolling through adorable baby and cat videos, they only focus on investment advice that appears on their newsfeed from various useful social media groups they are following.

47 per cent of the investors who used financial advisers say that they spend a good few hours of their day on Facebook and Twitter, finding market-related advice and opinions from as many sources as possible. In comparison, only 26 per cent of those who made investment decisions on their own admitted to using social media to learn about the markets.

Moreover, investors with advisers also tend to use Amazon, Google or Apple’s voice assistants to enquire about the current market conditions. 39 per cent of them revealed that they use some sort of a home device to stay ahead in the investment game in comparison to only 12 per cent of those who don’t prefer using financial advisers.

According to the survey, 9 out of 10 participants said that they used technology regularly, but less than 73 per cent of them actually invested in it

Getting Advice From Different Sources

So why is there such a vast difference between how people who use financial advisers and those who make investment decisions alone collect information on the stock markets?

Jay Jacob, a research director at Global X, says that investors who seek the advice of professional financial advisers are often early adopters when it comes to innovations and changing trends. These modern investors are more plugged in because they like to get opinions from various sources instead of just one.

Rachel Podnos, a financial adviser in Washington D.C. says that some of her wealthy clients give the entire investing responsibility to her and become completely hands free whereas others prefer staying involved in the process and learning about every market correction or new trend. Those who prefer to stay up to date are often the ones who started off as DIY investors already have plenty of experience under their belt.

But just because most of the wealthy investors prefer using technology for market updates doesn’t mean that they’re keen on investing in that sector. 9 out of 10 participants of the survey said that they used technology regularly, but less than 73 per cent of them actually invested in it.

And despite such a large number of them relying on Twitter and Facebook for financial information, only 28 per cent have invested in social media platforms. Just because social media is informative, doesn’t mean it has to be a lucrative investment.

Do you think social media is useful for getting personal finance advice?

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