Retail investors in Germany trust their friends and family more than their financial adviser when it comes to investment decisions, according to a study conducted by the Department of Communication Management at the University of Leipzig.
Their main sources of financial information remain the printed annual report and the shareholders’ newsletter, which are received in hard copy and reviewed thoroughly.
The use of online resources is also widespread among German individual shareholders, however, with the online version of the annual report described as a very useful and popular alternative, along with presentations, webcasts and transcripts. Participating in live events such as the AGM or attending company field trips or open days is not seen as indispensable.
In addition, German retail investors rely widely on third-party content, regularly consulting financial publications, watching business programs on television and using online forums and platforms. Financial journalists benefit from the strong confidence of the retail investor community and remain the most trusted source of information, before corporate IR websites. Financial advisers and brokers are ranked lower than journalists and friends on the trust scale, however.
As in the rest of Europe, the use of social media for investments is still in its infancy: almost half of investors never use them. The study highlights that as the IR website increasingly becomes a focal point for financial and strategic information, social media applications that are embedded into the website should progressively become mainstream, especially among younger investors.
Information providers such as Bloomberg and Thomson Reuters, which are universally used by institutional investors and sell-side analysts, are not favored by individual shareholders. Indeed, although they expect the same level of disclosure as financial professionals, the majority of German retail investors are keen on using news channels that are free of charge.
