The internet is changing the way high net worth individuals (HNWIs) source information about investments. But while the overall trend is to do more over the internet, the uptake differs markedly among segments, and some groups remain doggedly attached to non-internet sources.
Research in Australia into what sources HNWIs use for information showed the dramatic rise in the importance of the internet over time. Ten years ago, the internet was the sixth most preferred sources, now it’s top – with 67.4 percent of millionaires going to it first for information about investing, provider quality and economic data (CoreData).
But the uptake differs within the HNWI population and certain segments still prioritise other sources. This same research found that HNWIs who were part of ‘fraternal organisations’, like accountancy or law, still turning to each other as their first choice.
These findings chime with Ledbury’s own qualitative research within the professions. In Ledbury’s ‘Accountants and Solicitors Tribe’ report, we noted that this segment actively discussed finances and investments with their fellows, and this informed how and where to invest. A young corporate solicitor said: “One of the biggest things we rely on is word of mouth within the city. With lawyers or bankers and accountants that we’re always having dealings with, there are always discussions around money and investment”. They learn about markets, speak to those with similar interests, and discuss ideas and perspectives.
While less pronounced, we found similar fraternal sharing happening within the medical profession. In our ‘Doctors Tribe’ report we commented on their propensity to discuss matters of finances and investments with other doctor colleagues. A neurologist we interviewed who actively traded liquid assets, noted that in addition to doing his own research, he would meet with other medical colleagues in a restaurant or café to debate investment ideas. Those who dispensed bad advice then have to pick up the bill.
The preferences among these fraternal organisations serve to illustrate the less obvious obstacles to the further progress of the internet. And where peer advice is as ingrained as it is among the professions, the internet’s further progress will be slower.