Social Media Financial Advice: A Recipe for Disaster?

Strategic Insights -

A majority of people who have acted on financial advice from social media have ended up losing money, according to a recent study by TSB. The survey found that 31% of people had acted on financial advice on social media platforms, but 55% of those said they had lost money. This warning comes as the Financial Conduct Authority (FCA) cracks down on rogue financial influencers, also known as "finfluencers," who use social media to promote unregulated investments and fake returns.

Key Takeaways:

  • Over 31% of people have acted on financial advice on social media platforms, but 55% of those said they had lost money, according to TSB's research.
  • 90% of people surveyed had seen an investment opportunity on social media, and 43% would consider investing as a result.
  • 43% of people felt worse about their finances after seeing posts about wealth on social media, with 16-24 year-olds being the most likely to feel downbeat (67%).
  • Over 90% of the people surveyed had seen investment opportunities on social media, with 43% considering investing as a result.
  • Some 43% of people felt worse about their finances after reading social media posts about wealth.
  • Surina Somal, director of everyday banking at TSB, warned that people should do their research to check that content is accurate before acting on it.
  • The FCA has launched a crackdown on rogue financial influencers, who use social media to promote unregulated investments and fake returns.
  • Jenny Ross, Which? Money editor, cautioned that having a large following on social media doesn't mean someone can be trusted to give financial advice.
  • Always keep in mind that if an opportunity sounds too good to be true, it probably is, and be wary of 'get rich quick' promises and unrealistic returns.

Statistics:

  • 31% of people acted on financial advice on social media (TSB research)
  • 55% of those who acted on financial advice on social media lost money (TSB research)
  • 90% of people surveyed had seen an investment opportunity on social media
  • 43% of people would consider investing as a result of seeing investment opportunities on social media
  • 43% of people felt worse about their finances after seeing posts about wealth on social media
  • 16-24 year-olds made up 67% of those who felt downbeat about their finances after seeing social media posts about wealth
  • 55% of those who acted on financial advice on social media lost money (TSB research)
  • More than 1,800 people were surveyed by Censuswide in June for TSB
  • 22% of over-55s said they felt worse about their finances after seeing social media posts about wealth

Sources:

  • TSB research, commissioned by the bank
  • Censuswide survey, conducted in June for TSB
  • Financial Conduct Authority (FCA) statement on crackdown on rogue financial influencers
  • Which? Money editor, Jenny Ross, statement on social media financial advice
  • PA Archive, captioned image of TSB warning about "get rich quick" promises on social media.