The jury is in, and many suggest avoiding social media for financial advice. While Gen Z might be the biggest users of such advice, we’re all likely guilty to some extent. Often provided via TikTok, Instagram, Facebook, Twitter and other social platforms, you have to be careful about what you hear.
Often what you get is not enough information, misleading or incorrect details, or even biased info masquerading as sponsored content. This might be especially true with any sort of investing advice.
Some things to keep in mind about social media advice for finance:
- If they’re selling something, you might not be getting the best advice
- If they are trying to ‘live their best life’ and posing in front of a fancy car or private plane, you might not be getting the best advice
This doesn’t mean that you can’t find genuinely useful finance advice. But you should be thinking about what they say, and possibly take any advice with a grain of salt.
According to a recent study by the Financial Consumer Agency of Canada (FCAC) a considerable amount of younger Canadians from ages 18-34 have used the Internet for financial advice, but it doesn’t suggest whether the sources were just TikTokers or whether this included sources like articles or blogs. GoodCheddar does not make claims to be an expert, but we
There is a lot of trust going towards finfluencers or FinTok (short for financial TikTok) that is causing some of the concern. Possibly the worst being influencers providing investment advice, without any warnings go with them. As some influencers are able to generate an income with their content through product endorsements and similar, it becomes concerning about which influencer might put standards first, and which are only interested in generating revenue. Some of these may rely on your Fomo to get attention and sales.
Not every instance of finance advice on social media is obvious about it’s intent or how reliable it might be, but when you see something like this you should have an idea of what you’re getting.
@klarna Not everything makes it past the honeymoon stage, so we cover returns, too. 👰♀️: @adrianbliss #klarna #fintok #bnpl #fyp ♬ original sound – klarna
What you should do when looking at financial advice on social media is to think for yourself and probably do follow up research, rather than taking anything said online at face value.
Don’t presume that because someone has lots of followers or likes or similar that this would make them legit.
In another study from Scotiabank’s Advice+ it mentioned more than a third of Canadians rely on financial advisors, along with other sources like parents, spouses and friends. It also mentioned that about 34% believe the worst financial advice comes from social media platforms, and 2% say they look to their horoscope.
Maybe the rise in finfluencers had to do with the pandemic, or maybe it something else, but they seem to be everywhere.