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Social Media and Finance – Canadian View

Social media and money

by JOEL SCHLESINGER  •  MARCH 12, 2011

Today, social media have new-found clout.  And yet when it comes to fomenting revolutionary change in the way we educate ourselves about personal finance, social media have yet to ignite a spark, a recent poll has found.

Many Canadians (42 per cent) may use the web to beef up on financial proficiency, but only about six per cent use Facebook, blogs or Twitter to get financial information, according to the poll sponsored by Investors Group.

“I found this quite heartening,” says Christine Van Cauwenberghe, director, tax and estate planning at Investors Group.

“Everyone’s on them (Facebook and Twitter) so it’s good to see people understand there’s not a lot of regulation and people could put on whatever they want.”

It is a user beware world, she says.

Yet even though these social media platforms are the Wild West of the digital realm, there’s no denying they play an increasingly important role in the lives of many.

While few Canadians overall use social media as a financial-information source, individuals under 30 — unsurprisingly — are more inclined to use social media for this purpose, the poll found.

About three in 10 in this age group considered Facebook a good source of advice while one-quarter surveyed would use Twitter and 72 per cent would use blogs.

Social media’s growing influence is a fact not missed by financial firms. Many Canadian financial institutions have set up Facebook pages and Twitter feeds.

But beyond having a presence, few have yet figured out how social media fit into the puzzle of serving their customers.

Desjardins Group — the Quebec-based credit union — recently took a few pioneering steps in this regard, holding real-time Q and A sessions for its members on Facebook and Twitter.

Wealth-management business co-ordinator Jean-Rémy Deschênes says Desjardins saw the sessions as a way to reach out to clients less likely to seek advice at a branch about savings and finance.

“Facebook and Twitter came to mind naturally to reach younger generations and not necessarily students,” says Deschênes, who writes a financial blog for Desjardins.

The two-hour session held in January on Twitter attracted 100 users, asking 20 questions, and in February, a Facebook live chat drew 500 users, again asking about 20 questions.

“What’s important is not how many questions got asked, as much as the type of questions they were asking and how social media turned out to be a good alternative to a personal visit to their financial planner,” he says.

The participating experts, who included a tax planner, financial planner, investment adviser and insurance specialist, did face some challenges in trying to provide advice in both formats.

“Posting financial advice with a maximum of 140 characters on Twitter is quite challenging, but it worked well,” he says. “Two hours in a live-chat session is really being in the hot seat as an expert.”

The questions were wide-ranging, from retirement to saving for education to how to teach children about money — and they required quick answers.

“As soon as possible for Facebook and Twitter doesn’t mean the next day.”

He says Desjardins’ first foray into social media was a success and more sessions are planned, but social media as education tools have their limitations.

“We feel social media should never be used as the sole source of financial information to get advice,” Deschenes says. “Social media are helpful to answer a specific question, but they’re not intended for every aspect of our members’ situations.”

While Twitter and Facebook are indeed great “launch pads” for engaging users in a discussion about finance, it’s potentially ripe for abuse, Van Cauwenberghe says.

“Someone could just put a stock tip on Twitter or Facebook and it could have no validity whatsoever.”

Besides, few people have time to filter through the seemingly endless stream of information, deciphering the bad from the good.

“Personally I find that my email is more cluttered than it ever has been,” she says. “There’s more noise than I’ve ever experienced because now it’s so easy for people to find you and bombard you with all these little tweets.”

Stephanie Rauterkus, a professor of finance at the University of Alabama in Birmingham, writes a blog on day-to-day personal finance called 365 Days on a Budget and regularly tweets info on business and finance to her students.

She agrees social media can be a double-edged sword as a resource for personal finance information.

“The things that are so great about social media are also the things that are potentially so terrible,” says the associate professor, an expert in affordable housing for low-income families and personal finance.

On the one hand, they offer immediate access to a lot of information on any topic, personal finance included. On the other, it’s up to users to judge whether that information is credible.

Fortunately, many financial experts are writing good blogs and they, in turn, often have great Twitter feeds, she says.

Yes, there’s a lot noise, but it’s easy enough to filter out.

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Written by Rich and Co.

March 12, 2011 at 2:24 pm

Posted in Uncategorized

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