Some 18.6 million UK adults, particularly those aged between 18 and 24, trust financial advice shared on social media platforms like TikTok, Instagram and Facebook (FB).
This comes even as TikTok announced that it would ban financial services promoted on the platform, in an effort to limit the spread of dangerous advice and misleading information online.
Skipton Building Society’s research shows that the majority (64%) of 18- to 34-year-olds trust advice shared online.
This is in contrast to those aged 35 and above, with 46% certain that they would not trust a social influencer for financial advice.
“When it comes to getting our finances in order, social media can feel like a good place to go for advice, because it’s anonymous and helps avoid conversations which can sometimes feel uncomfortable,” said Helen McGinty, head of financial advice delivery at Skipton Building Society.
“However, it’s vital to make sure that the advice you’re following is reliable and credible, especially when it comes to investing your own money.”
She said there are a lot of very well-informed voices and influencers on these platforms, but sometimes when it comes to investment advice, content isn’t always as trustworthy as it appears, and crucially it isn’t financially regulated.
“So if you’re looking to invest or make the most of your pension, it’s worth seeking out professional, regulated advice first,” said McGinty.
Skipton also commissioned an experiment which involved creating a number of fictional social media personalities, each of whom were offering the same financial advice.
This was presented to a panel who were asked how likely they would be to follow the advice of each personality and why.
Overall, the test revealed that people want to be able to relate to the person sharing financial advice, and those who are in a similar position to them are the most likely to be trusted.
A female parenting and money management influencer was regarded as the most reliable person to take financial advice from when presented in isolation, with nearly three quarters (71%) of respondents trusting her.
Many highlighted the fact that she is a mum who appears to live a “normal life” when reflecting on the reasons they trust her.
But once respondents were shown the full list of social media personalities, the profile of a "male retired business owner and profitable investor" was seen to be the most trusted to provide reliable financial advice (21%).
The study also showed that when respondents were asked who they would trust the most to provide reliable money management advice, financial advisors (87%) and successful businesspeople (86%) came out on top.
McGinty said this was “pleasing to see.”
Over three quarters (77%) said they would trust their spouses. Those who trusted loved ones said this was because they felt they had their best interests at heart (55%).
Consumers favour a personal touch when it comes to financial advice, with half (50%) preferring to have a personal connection with the person they seek advice from. When it comes to financial advisors, 55% of respondents said strong financial knowledge was key to winning their trust.
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