How mutual fund brands can provide useful information to investors on social media

The widespread availability of financial information via digital platforms appears to have greatly influenced investment decisions nationwide, with social media emerging as a pivotal factor.

A study carried out by Edelweiss Mutual Fund on the importance of providing the latest news and updates by any MF brand revealed that most investors prefer to invest in a brand that provides useful information. This holds true across age brackets, though the younger audience aged 25-35 years and 36-45 years gave slightly more weightage to it than the 46-50-year-olds. In an industry, which is seeing growing interest from millennials and GenZ investors, distributors must broaden their social media footprint. 

As per data by the Association of Mutual Funds in India, nearly 50% of individual investors were in the 25-35-year bracket in March 2023 vs just ~35% 10 years ago.

The report by Edelweiss mentioned that both short- and long-format videos can be used to disseminate information. The short format works well on platforms such as Instagram and YouTube Shorts, while the long format works well on platforms such as YouTube. Distributors can also use social media messaging platforms such as WhatsApp, Telegram, etc to disseminate correct information to their investors. Doing so will help them to not only further their brand but also provide information at the right time to investors and handhold them during volatile market phases.

MF distributors can use AI for tasks such as writing social media posts, optimising the posts across platforms and making them interactive, optimising post timings for greater impact and fine-tuning based on impact analysis.

In the report, Kirtan Shah, a certified financial planner, said, “I use both text and video to capitalise on the strengths of each social media platform. Text works well on X and LinkedIn, while videos are more suited to Instagram and YouTube. You can use the same content — with small tweaks — on many platforms. For example, a long post will work best for LinkedIn, but for X a short one will be better. Similarly, short reels are best for Instagram, and a 7-8 minute video does very well on YouTube.” 

He added, “Mutual fund distributors should start making content on these platforms specifically because there is so much misinformation being spread by the same content creators that we need professionals to spread the right knowledge.”

According to a study by Edelweiss Mutual Fund, social media was the fifth most important source of information and driver of investment decisions among investors. This is reflected in the growing subscriber base of finfluencers in the country.

Stating the Business Today story ‘Rise of the Finfluencers’, the Edelweiss Mutual Fund Sahi Hai report highlighted that the YouTube stars spreading awareness about stock investing and finance, seven of the top 15 searched channels were of individuals and the rest of institutions. However, the reach of the individual influencers was five times greater than that of the institutions.

A similar trend was observed by The Good Creator. As per the influencer marketing platform, in 2023, of the top 50 by maximum follower count, only 11 were institutions and 39 were individual influencers. Also, the average reach of Instagram finfluencers was more than 10 lakh subscribers, with a minimum of 5+ lakh subscribers and a maximum of 40+ lakh, clearly highlighting the large influence base.