Access to Investment Strategies – Through mirrored investing, inexperienced or small investors can access the investment strategies of other users, but there are fees involved, and in some cases they can be relatively high. If following an investor who trades frequently, per trade fees can soon add up, andwith some charging annual fees of up to 2%of the portfolio value, rates can be higher than for professional advice or even a direct mutual fund investment. Mirrored investing sites do have high performing investors, but the question remains as to whether the strategy they are following is appropriate for the users’ investor profile as there aremajor differences between young investors’risk profile and those of retirees. Questions also arise regarding the expertise and track record of the mirrored investors. Professional asset managers at major fund houses can demonstrate a solid track record and achieve major gains for their investors, but it is unlikely suchmanagers will be present on a mirrored investing site. Disruptive models may prove to be a popular way for the younger generation to invest and access advice. A survey by TD Ameritrade Holding Corp. in 2011 noted that one in three Generation Y respondents used social media as a source of investment advice and only 10 percent considered professional investment advisors as the most valuable source of financial news and information. The survey sawmany turning away from expensive investment advice, and, being comfortable online, using Twitter instead. Some disruptive models may prove, in the future, to draw in greater numbers of users as they become more widely accessible.
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