The Finfluencer Dilemma: Navigating Social Media Advice Safely

In today’s digital age, social media platforms like TikTok, Instagram, and YouTube are buzzing with financial tips and investment strategies from a new breed of content creators known as finfluencers. While it’s fantastic to see financial topics becoming more accessible, it’s crucial to understand the difference between information and advice. This distinction can help you make informed decisions and protect your hard-earned money.

Information vs. Advice: Understanding the Difference

Finfluencers often share valuable information—general tips on saving, budgeting, and investing—that can inspire and educate their followers. For example, advice like “save more” or “diversify your investments” is universally applicable and low-risk. These insights can spark important conversations about financial well-being and encourage positive habits.

However, there’s a significant difference when it comes to specific financial advice. This type of advice involves tailored recommendations about where you should invest your money, such as buying a particular stock or investing in a specific fund. Unlike general tips, specific advice carries real risks and should only come from qualified, regulated professionals. Without proper guidance, following specific advice from unverified sources can lead to substantial financial losses.

The Risks of Following Finfluencers

A recent study by Barclays highlights the growing concern around finfluencers. 73% of the 2,011 surveyed believe there should be a verification system for financial influencers. This sentiment is echoed by the fact that 51% of Brits using social media for investment guidance are putting their money at risk by not verifying the reliability of the advice they receive.

Moreover, 23% of Brits turn to social media, community messaging apps, and online forums for investment guidance. While 19% appreciate the free access to financial experts, and 26% find these platforms quick and easy to use, the lack of verification means that 19% are also drawn by the easily digestible content format. This trend is particularly strong among younger generations, with 37% of Gen Z (aged 18-24) using these channels for investment support.

Despite the popularity, 39% of 18-24-year-olds feel unsafe on social media due to the prevalence of scams. Finfluencers often blur the lines between objective advice and advertisement, especially when they receive money for endorsing products. This conflict of interest can compromise the integrity of the advice they provide.

Limited Access to Professional Advisers

Interestingly, 92% of the population don’t have access to financial advisers. Most advisers cater to wealthy clients, typically those with over £200,000 in investable assets. Ask yourself, am I likely to meet a regulated adviser on TikTok? This leaves the majority of people managing their investments independently through various platforms. Without professional guidance, the risk of making unsuitable investment decisions increases, especially when relying on unverified advice from finfluencers.

Keep It Simple: Safe Investment Strategies

At the Academy of Life Planning, we believe in keeping your financial strategies boring but effective. For most people, the best approach is to invest in low-cost, well-diversified funds. These funds are accessible from numerous providers and offer exposure to the entire market, targeting stable, long-term growth without the stress of trying to outsmart the market.

Avoid high-risk investments like individual stocks, cryptocurrencies, or speculative ventures unless you’re prepared to lose your entire investment. If a finfluencer encourages you to invest in something that sounds too good to be true, it probably is. Instead, focus on maintaining simple, low-cost investment strategies that safeguard your financial capital while you concentrate on building your human capital—your skills, knowledge, and connections that drive your future earnings and personal growth.

Why Choose the Academy of Life Planning?

Navigating the financial landscape can be daunting, especially with the overwhelming amount of information available online. That’s where the Academy of Life Planning comes in. We’re a community of expert, independent advisers committed to providing generic advice that’s accessible to everyone, not just the wealthy. Our focus is on selling plans, not products, ensuring that our guidance is aligned with your personal values and long-term goals. You’ll find our members sharing insights on social media, as generic advice can be provided to a broad audience, helping many people at once. However, specific advice is different—it’s tailored to individual circumstances and can’t be given to groups because it needs to be personal and precise.

Here’s how we make a difference:

Independent and Transparent: Our advice is free from any product commissions, putting your interests first.
Accessible to All: hether you’re investing £200 or £200,000, our advice stays simple and effective: focus on low-cost, well-diversified strategies that aim for steady market returns. It’s a straightforward approach designed to keep your investments safe and on track for long-term growth.
Educational Support: We empower you with the knowledge to make informed decisions, without the jargon and complexity often found in traditional financial advice. Our team holds professional credentials, ensuring the advice you receive is trustworthy and grounded in expertise. While some finfluencers may also have these qualifications, we go a step further by focusing solely on your needs, offering clear guidance that helps you navigate your financial journey with confidence.

Building Trust and Ensuring Safety

Building trust in the financial world is essential. The Barclays study shows a clear demand for better verification of finfluencers’ credentials to prevent scams and unsuitable advice. Until such systems are in place, For many, accessing regulated advice from qualified professionals isn’t always an option due to limited assets, as financial advisers typically serve clients with larger portfolios. But that doesn’t mean you’re without options. The key is to rely on verified, trusted sources to guide your financial decisions.

When assessing financial advice on social media, consider:

Is the person qualified to offer specific advice?
Are they registered with a regulatory body like the FCA?
Are they promoting a product or encouraging you to part with your money?

If you’re unsure, it’s best to turn to reliable resources for sound guidance. We recommend these trusted sources for clear, unbiased advice:

These resources can help you make informed decisions, ensuring your financial journey is based on solid, trustworthy advice.

A Call for Simplicity and Safety

In a world where 92% of people don’t have access to traditional financial advisers, it’s more important than ever to keep your financial strategies straightforward and secure. By investing in low-cost, diversified funds, you can achieve reliable market returns without unnecessary risks. Meanwhile, focus on enhancing your human capital to unlock exciting opportunities for personal and professional growth.

If you want to be your own financial adviser we highly recommend Jonquil Lowe’s book, Be Your Own Financial Adviser.

Need expert guidance? Join us at the Academy of Life Planning, where we help you build a comprehensive life plan that aligns with your goals and values—without the pressure of product sales or commissions. We’re here to support you on your financial journey, ensuring your money works for you, safely and wisely.