To tweet or not to tweet - that is the question…
My former employer, MHP Communications recently commissioned a survey looking at the asset management industry’s enthusiasm (or lack there of) towards social media.
Its findings showed that only 35% of the reviewed asset management firms were active on Twitter, i.e. that actually tweeted and didn’t just have a holding page to avoid/highlight fakes.
However, according to a recent article by Tom Osborn in Financial News: Social media FX: the future of trading?, this case doesn’t appear to be the same of FX traders.
Osborn argues that FX traders are more open to the idea of tweeting because: “the global foreign exchange market is so huge that the activities of retail investors are highly unlikely to have an impact on price, especially in the main currency pairs.” However, the same could be argued for fund managers within the asset management industry.
Therefore, what is the real driving force behind this unlikely enthusiasm these experts have to make their top tips so readily available to the rest of the world?
Whatever it is, it can only be a good thing. Greater transparency within the financial industry in general has been the name of the game since the recession hit. Be it the Dodd-Frank Act for hedge funds, the International Accounting Standards Board (IASB) lease accounting rule reforms for lessees and lessors or the Treasury Select Committee (TSC) demands that the Financial Services Authority (FSA) disclose all bankers paid more than £1 million.
Tools such as Twitter allow this to happen (although – granted - in a very public and intimidating way for the investment community), and the precedent that the FX industry is setting is a step in the right direction.