Canadian investors prefer the short soundbites of Kevin O’Leary or Larry Kramer to proper analytical print media such as the Report on Business, Wall Street Journal or Financial Post, according to a new survey. However, despite the increasing popularity and adoption of social media, they still rely on traditional news media as sources for investing information and advice.
The study, conducted for BMO InvestorLine, reveals that more than half of investors look to traditional media such as TV and newspapers for investing information and advice, and around one-third use social media sources such as LinkedIn. It also revealed that one in 10 Canadians use Facebook as a source of financial advice.
“Any investor should use multiple sources of information – TV, print, social media and the like – and they should be cross-referencing them as part of their own due diligence process,” said Richard Charter, a Toronto-based, fee-only advisor.
“I think they’re all viable, but it all comes down to the source and how credible the source is,” he said. “If you’re getting the Financial Post via paper, or you’re getting the Financial Post via Twitter, there’s not a lot of difference.”
Still, Charter agrees that information on Facebook should be more rigorously vetted.
“I would say out of all the social media sources Linked-In is more business-oriented and Facebook is more personal, and as a result Facebook should be put under much greater scrutiny,” added Charter, who is also a director for the British Canadian Chamber of Trade and Commerce.
Among traditional media, TV and business news shows were viewed as being the most trustworthy source, while blogs were considered the most credible social media source.
According to the study, 57% of investors rely on traditional media sources, whereas only one-third look to social media. The specific media platforms used as sources by investors include:
• TV news and business news shows (36%)
• Print editions of newspapers and magazines (30%)
• Online editions of newspapers and magazines (24%)
• An online investing service provider (22%)
• Online financial communities and forums (22 per cent)
• Radio (12%)
• Facebook (9%)
• Blogs (7%)
• Mobile investing app (5%)
• Twitter (4%)
• LinkedIn (3%)
“It’s interesting to see that, while an increasing number of Canadians have been embracing social media for a variety of reasons, investors still prefer more ‘traditional’ media sources for the information and advice they need,” said Viki Lazaris, president and chief executive of BMO InvestorLine. “Regardless of where you get your investing information, do your due diligence and ensure it’s coming from a reputable source.”
When asked how much Canadian investors trust these platforms, the study found that, on average, traditional media sources were trusted by 61% of investors, while social media sources were trusted by 24%. Specifically:
• More than two-thirds, 69%, find TV news and business news shows trustworthy.
• More than half, 55%, find print and online editions of newspapers and magazines trustworthy.
• Almost half, 48%, find radio trustworthy.
For social media:
• Only 21% find blogs trustworthy as a source of investment information.
• Fewer than than 20% find LinkedIn trustworthy
• Facebook is seen as a legitimate source for investing insights by 13%.
• Twitter is seen as trustworthy as a source of investment information by 12%
The survey was conducted online by Pollara between July 26-30, with a sample of 1,020 Canadians aged 18 and older. Overall results for a probability sample of this size would be accurate to +/- 3.1%, 19 times out of 20.