Enhancing the quality of financial advice with web 2.0: an approach considering social capital in private asset allocation

Abstract

Although theoretically necessary, social capital is usually not considered within the process of asset allocation for private investors. Both the lack of appropriate practical valuation concepts and the effort of providing and processing the required information as input for a valuation have been obstacles to properly include social capital in this process. However, first theoretical financial models for the evaluation of social capital have recently become available. Moreover, the fast growth of business community websites and the technological progress in Web 2.0 tools that allow and acquire the active involvement of users, facilitate the provision and processing of valuation-relevant information. In this paper we focus on this second aspect and propose a social software-based concept that allows for an integration of social capital in the asset allocation process.