A quarter of adults under the age of 24 now use social media for their financial guidance, according to a new study by Deloitte.
In a survey of more than 2,500 UK consumers, the accounting and professional services group learnt that one in five consumers in the 18-24 age group had invested money based on social media recommendations alone.
“It is troubling that, instead of reaching out to trusted providers, many people are turning instead to what is often unregulated financial and investment advice from ‘finfluencers’ on social media,” said Margaret Doyle, chief insights officer at Deloitte.
“With the rise of technologies like deep fakes, relying on social media for advice makes people vulnerable to scams, phishing, and risky financial decisions. There is financial education and support available from government agencies, banks, insurers, investment managers and charities.”
The warning comes amid an ongoing probe of online promotions by the Financial Conduct Authority, including the use of financial influencers.
Scott Guthrie, director general at the Influencer Marketing Trade Body (IMTB), said the proposed new regulations will combat misinformation, making social media a safer source for young people seeking help.
“To future-proof its regulations the FCA is updating its existing guidance on social media and customer communications, with the end-game of ensuring that consumers can access high-quality marketing information from influencers, enabling them to make informed decisions.”
Earlier this year &me Investing, the joint venture between M&G Investments and Moneyfarm launched a marketing campaign highlighting the perils of taking financial advice from individuals on social media.
In an interview with Financial Promoter in March, Shweta Sharma, senior brand marketing manager at &me Investing, said: “Reliable advice probably doesn’t come from cryptok1ng69. When everyone has got an opinion on investing, [it’s best to] go with a lifetime of expertise.”