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A recent report by Edelweiss Mutual Funds shows how the rising popularity of mutual funds in the last few years has coincided with the increase in users of the internet and various social media platforms. It also discusses the importance of financial influencers or finfluencers in increasing financial awareness among the masses.
Internet and Mutual Funds: A parallel rise
Over the last 5 years, the number of mutual fund folios has increased by 15% while the number of broadband users has increased by 10-12%. At the same time, the number of social media subscribers has more than doubled from 404 million in 2018 to 833 million in 2023.
The Edelweiss MF study also shows social media as the fifth-most important source of information and driver of investment decisions among investors. YouTube and Instagram are the two most popular platforms. While the top 15 financial influencers on YouTube have an average reach of about 9 lakhs, the number is about 12 lakhs for the top 15 financial influencers on Instagram.
Utilizing the potential of social media
The study further revealed that access to relevant information of mutual fund brands and products is key for investors across all age brackets, especially for investors in the 25-45 age bracket. About 50% of all investors come from this age group.
The right use of social media platforms by MFDs can help investors in their decision making. Short form videos can work well on platforms like Instagram and YouTube Shorts while long form videos are suitable for YouTube. Besides this, platforms like WhatsApp, Telegram etc. can also be useful to provide timely advice to investors. This information can be divided based on factors like age, gender, risk profile and financial goals.
Leveraging the latest technology
The report also discusses the potential role AI can play in the MF industry. It can help MFDs write social media posts, optimize them across platforms and fine-tune their social media strategies. It concludes emphasizing the importance of good governance and best practices by all stakeholders for the benefit of everyone.
