Social Media isn’t a reliable source of Financial Advice
People are increasingly seeking financial guidance on social media. While financial influencers – or ‘finfluencers’ – can be useful in raising awareness around financial matters, there is also a darker side to the growth of unregulated advisers.
Social media age
In the UK, more than one in four people use some combination of social media, community messaging apps and online forums for investment guidance, research ## shows. Of those who get their investment advice from social media, one in five cited ‘free access to financial experts’ as a reason. Meanwhile, one in four pointed to the fact it was ‘quick and easy to use’ as justification.
Not all advice is equal
Entrusting your financial decisions to social media, however, comes with risks. One significant danger is that many people are failing to carry out checks on the advice they see online. Specifically, the same study found that more than half of UK adults who use social media for investment guidance do not carry out checks to verify the reliability of ‘finfluencers’ and their content. Young people are especially vulnerable, with increasing numbers falling victim to scams, with finfluencers often involved.
FCA crackdown
The FCA has interviewed 20 finfluencers who may be illegally selling financial services products; the FCA has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions. In many instances, these influencers are not FCA-authorised and don’t have the qualifications to give financial advice.
Despite the fact anyone can pose as an expert online, fewer than half of those using ‘finfluencers’ always check that the information comes from a reliable source. Social media has its advantages, but making sure the advice comes from an accredited professional is the best way to steer clear of unsuitable investment advice and scams.
## Barclays, 2024
How we can help
Social Media isn’t a safe or reliable source of advice or information, especially when it involves something as important as your finances. With many years of professional experience, we’re here to guide you with any aspect of your finances, including pensions and investments, mortgages and business planning. So if you need our help why not arrange a preliminary meeting with us free of charge and without obligation. Get in touch on 0808 123 4321.
Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire, and the surrounding area, but not limited to the region.