A new study indicates that many insurance customers are logging on to social media websites for investment-related reasons.
According to the report, titled "Social Media's Impact on Personal Finance and Investing," market research and consulting firm Cogent Research finds that investors' decisions are frequently based on analyses and observations they've made through social media channels such as LinkedIn, Facebook and Twitter.
Based on data from 4,000 investors who have investable assets valued at more than $100,000, the report found that in 70 percent of instances, investors reallocated their holdings or changed the relationship with specific investment products as a direct result of social media engagement.
In previous studies conducted by Cogent Research, the consulting firm has found that more than one in every four consumers - U.S. adults, specifically - uses social media for personal finance and investment decisions.
Business owners have glommed on to the fact that more people are using social media, and as a result, are using it more regularly. Tony Ferreira, Cogent Research's managing director, advised that the more regular use of social media carries with it some risk.
"For every positive comment and favorable investment decision comes the possibility for damaging content," said Ferreira. "However, the larger risk to a firm is ignoring negative comments that may already exist."
According to a separate report poll conducted by the Small Business Authority, close to 60 percent of business owners use social media to engage with their customers. Approximately 55 percent of respondents also said that it was a significant outlet for overall sales growth. More than half of the poll's participants additionally indicated that social media had enabled them to grow their clientele base.