Social Media Intelligence: Challenging The Advisory Model

There is a seismic shift in financial services as social media platforms become critical sources of investment data for traders and advised clients. Professional and amateur online communities are flourishing, offering tips, opinions, and strategies that are reshaping the investment landscape, if not adding to misinformation and market volatility. Financial advisors, institutions, and fintechs need to adapt to this new reality. The end-client investor is checking professional financial advice against social media and news sources, which are increasingly aggregated with intelligent indicators for investments and individual securities. Advisors are over-consuming content to stay up to date on the latest market intelligence, leading investor engagement to become more convoluted. 

Properly analyzed, social media intelligence can measure the impact of breaking news and investor sentiment, providing an early warning system for securities movement. But this is a double-edged sword: Industry studies indicate that 60% of investors (ages 18 to 34) use social media as a source of investment information while Javelin channel checks indicate that many advisors feel that social media "noise" complicates professional advice. The noise needs to be addressed. On the investor and advisor sides of the conversation, a new model of engagement is emerging as social media plays a greater role in the investment decision-making process.

Key questions discussed in this report:

• How is social media integration with trading and brokerage platforms changing the advised investor conversation? 
• How must financial advisors and fintechs adapt to this new model of advisor-client engagement? 
• What is the future of social media influence on investment decisions? Does it and should it have a future?

Companies Mentioned:

4chan, Algolia, BlackRock, Canoe, CFP Board, Charles Schwab, Context Analytics, E-Trade, Facebook, Federal Reserve, Fidelity, Google DeepMind, Instagram, InteractiveBrokers, LikeFolio, LinkedIn, Mirador, NinjaTrader, Reddit, Stockgeist.ai, StockSnips, Stocktwits, Swaggystocks, Snyk, Thinkorswim, TikTok, TopStonks, Twitch, WallStreetBets, X